Despicable

Suppose a company is currently considering 5 projects (A, B, C, D, and E). Project D and E have negative

NPVs, the other 3 are positive NPV projects. Which of the following statements is true

If the projects are non-mutually exclusive, then the company should accept

projects A, B, and C

Which of the following options best describes the cost of capital

The return that investors expect to earn for providing investment capital to a

company

Internal Rate of Return (IRR), as described in class, is best characterized by which statement below

The annualized rate expected return on a corporate investment project

Suppose Zavier owns a portfolio of 13 randomly chosen stocks. Which of the following statements is

true?

Zavier is exposed to more idiosyncratic risk that Aliya who owns 22 randomly

chosen stocks

Which of the following statements best describes the cash flows from Net Working Capital (NWC) as

discussed in class:

These cash flows are generated from the production and sale of goods and

services but are NOT reported on the income statement

Suppose Diversified Energy. is considering three mutually exclusive projects, project A has an NPV of

$231,000, project B has an NPV of $174,000, and project C has an NPV of $–124,000. Given the project

NPVs which project(s) should Diversified Energy accept

Only project A

Under what conditions is the internal rate of return (IRR) not a reliable method for evaluating corporate

projects?

When project cash flows change signs more than once

Which of the following is NOT a true statement for the internal rate of return (IRR)

When comparing projects, the project with the highest IRR adds the most value