[CFA level 1模拟真题]Version 4 Questions－Q38 style, medium, border, face

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Q38

After-tax component costs:
Long-term debt	6%
Preferred stock	10%
Retained earnings	15%
Net present values of four independent projects:
Warehouse project	$426
Equipment project	$378
Product line project	$0
Inventory system project	-$185

If no significant size or timing differences exist among the projects and the projects all have the same risk as the company, the project with an internal ate of return closest to 10 percent is the:

A.      warehouse project

B.      equipment project

C.      Product line project

D.     Inventory system project

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答案和详解如下：

Q38.  C  Study Session 11-47-d, 1148-a

The weighted average cost of capital for the company is 10% 0.5(6%)+0.l(10%)+0. 4(15%)=10%.1f the NPV is zero, the IRR is equal to the WACC.