Question

A corporate project has an Internal Rate of Return (IR

  • R of 16%. The company’s actual weighted average cost of capital (hurdle rate) is 12%. Without knowing the exact cash flow figures, what can be conclusively inferred about the project's Net Present Value (NP
  • V ?
A NPV is negative ((NPV<0)
B NPV is zero (NPV=0)
C NPV is positive (NPV> 0)
D NPV is equal to the hurdle rate (12%)
E NPV cannot be determined without the exact payback period
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