Which of the following statements is most correct? If a project’s internal rate of return (IRR) exceeds the cost of capital, then the project’s net present value (NPV) must be positive. If Project A...

Which of the following statements is most correct?

1. If a project’s internal rate of return (IRR) exceeds the cost of capital, then the project’s net present value (NPV) must be positive.


2. If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.


3. The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the cost of capital.


4. Answers a and c are correct.


5. None of the answers above are correct.