Project w requires a net investment of $1,000,000 and has a payback period of 5.6 years. you analyze project w and decide that year 1 free cash flow is $100,000 too low, and year 3 free cash flow is $100,000 too high. after making the necessary adjustments,

(a) the npv of project w will decrease,
(b) the payback period for project w will be longer than 5.6 years.
(c) the irr of project w will increase
(d) the payback period for project w will be shorter than 5.6 years

Option C is correct.

Explanation:

The paycheck of a period is the time within which the initial investment is recovered.

It does not consider the time value of money, which means all cash flows have equal weightage.

The paycheck period is 5.6 years and it will not be affect by the change in the cash flow in the year 1 and 3.

The IRR (Internal return rate) and NPV ( Net present Value) of the project will get affected as these methods give more weightage  to current flows than later.

Thus, increasing of year-1 cash flow decreasing of year-3 cash flow will increase the IRR and NPV of project.

Therefore, the correct answer is option C ( The IRR of the C will increase.)

the definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry. a local bakery that employs 10 people is an example of a small business. a manufacturing facility that employees less than 500 people is an example of a small business.

answer/// randomly assign the participants to the   conditions