Suppose a capital budgeting project generates its largest cash flows in the early years of its life (i. e., up front) rather than near the end of its life. In this situation, which of the following statements about the project must be correct?

a. The project will have multiple internal rates of return.
b. The required rate of return of the project must be revised throughout its life.
c. The net present value of the project must be negative.
d. The project's traditional payback period will be greater than the years expected to recover the original investment.
e. The net present value of the project is not as sensitive to changes in the firm's required rate of return as the net present value of a project that generates large cash flows later in its life.

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?