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Basic Question 17 of 29
Company A is considering a capital investment project. The appropriate discount rate for the project is WACC = 5%. The project has the following NPV and IRR: NPV = $50,000, IRR = 6.5%.
B. The project should be accepted since NPV > 0.
C. Both of the above are true.
Which of the following statements is true?
A. The project should be accepted since IRR > WACC.
B. The project should be accepted since NPV > 0.
C. Both of the above are true.
User Contributed Comments 2
| User | Comment |
|---|---|
| fedha | good question. Helps get the concepts straight. |
| tybe0012 | so IRR > discount rate = inititate. NPV >0 = initiate |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
describe the capital allocation process, calculate net present value (NPV), internal rate of return (IRR), and return on invested capital (ROIC), and contrast their use in capital allocation
CFA® 2024 Level I Curriculum, Volume 2, Module 5.