Business, 07.03.2020 05:11 jeffyisdrunk

Consider projects S and L. Both have normal cash flows, and the projects have the same risk, hence both are evaluated with the same WACC, 10%. However, S has a higher IRR than L. Which of the following statements is CORRECT?a. If Project S has a positive NPV, Project L must also have a positive NPV. b. If the WACC falls, each project's IRR will increase. c. If the WACC increases, each project's IRR will decrease. d. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined. Project S must have a higher NPV than Project L.

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Consider projects S and L. Both have normal cash flows, and the projects have the same risk, hence b...

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