Question
1. Which statement best summarizes each project's cash flows? a. Both Project A and B's cash flows are non-normal. b. Project A's cash flows are
1. Which statement best summarizes each project's cash flows?
a. Both Project A and B's cash flows are non-normal.
b. Project A's cash flows are normal, while Project B's cash flows are non-normal.
c. Both Project A and B's cash flows are normal.
d. Project A's cash flows are non-normal, while Project B's cash flows are normal.
2. Projects that have multiple internal rates of return (IRRs) should be avoided. (True or False)
3. If the NPV Profiles of two mutually exclusive projects do not cross, then:
a. The projects are of equal risk and value to the firm.
b. One project always dominates the other regardless of the WACC.
c. Neither project should be chosen.
d. The IRR will produce the opposite accept/reject decision as NPV.
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