Assuming that the project being considered has a normal cash flow, with one outf

Question

Assuming that the project being considered has a normal cash flow, with one outflow followed by a series of inflows which one is correct?

A project’s regular IRR is found by compounding the initial cost at the WACC to find the terminal value (TV), then discounting the TV at the WACC.

A project’s regular IRR is found by compounding the cash flows at the WACC to find the present value (PV), the discounting the TV to find the IRR.

If a project’s IRR is smaller than the WACC, then its NPV will be positive.

A project’s IRR is the discount rate that causes the PV of the inflows to equal the project’s cost.

If a project’s IRR is positive, then its NPV must also be positive.

Explanation / Answer

A project

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