1) What does a capital budgeting project with an NPV of zero mean? The projects IRR will be less than the required hurdle rate for the project B) the firms security holders will earn their required rate of return, given the risk of the investment C) the firms stockholders will earn a negative return D) The firms stockholders will earn a positive return, but it will be less than their required return, given E) none of the above

2) You are determining two mutually exclusive projects Both have the same initial outlay. Project Adam has an NPV of 4392. 15, an IRR of 11.53%, and an EAA of 1,158.64 Project EVe has an NPV of 5,833.73, an IRR of 9.88%. and an Eaa of 1093. The working capital for both is 9%. THe projectshave different lives and the projects are repeatable. What do you do? A) You should do both projects because they both have positive eNPV b) You should do project Adam because it has a higher rIRR C) Yu should do project EVE because it has a higher NPV D) YOu should do Project Adam because it has a higher EAA. E) You should do neither project becauseneither of them would add value to your company