Question
1. Project 1 has a NPV of $15,000 and an IRR of 20%. Project 2 has a NPV of $10,000 and an IRR of 35%,
1. Project 1 has a NPV of $15,000 and an IRR of 20%. Project 2 has a NPV of $10,000 and an IRR of 35%, but cost nothing upfront. Which project should you invest in?
Project 2
both
Project 1
none of the above
2. If a proposed capital project has an internal rate of return of 10% with a hurdle rate of 11%, what course of action is recommended?
The project should be rejected.
The payback model should be used to further analyze the financial feasibility of the project.
The hurdle rate should be recalculated using a different set of assumptions.
The project should be accepted.
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