Statements about project cash flows

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Reference no: EM131613037

Which of the following statements about project cash flows is most correct?

A) Interest expenses are definitely cash flows, and thus must be included in the project cash flow estimation for capital budgeting process.

B) Corporations should fully account for opportunity costs when making investment decisions.

C) Corporations should fully account for sunk costs when making investment decisions.

D) Depreciation expenses are not cash flows, and thus have no bearings on the project cash flow estimation in capital budgeting process.

2. Project A has an IRR of 15 percent and Project B has an IRR of 18 percent. If the WACC is 16%, the NPV of Project B will exceed that of Project A.

A) True

B) False

Reference no: EM131613037

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