11. A company is trying to decide between two independent projects. Each project has a cost of capital of 12%. Project A has an IRR of 11.4%. Project B has an IRR of 11.1%. Which project should the company choose if the goal of the firm is to maximize shareholder wealth?

Project A

Project B

Both projects should be chosen

Neither project should be chosen

This question cannot be answered unless we know the NPV of each project.

Assuming a specific single project with normal cash flows and a cost of capital of 10%, which of the following statements will ALWAYS be true: (Note: more than one of the following statements may be true; you must record ALL of the statements that are true to receive any credit. That is, if statements a, b and c are ALWAYS true, you must record, A, B, C as the correct answers to this problem to receive any credit. Any other letter or combination of letters will be marked wrong).

	If NPV > 0, then Payback Period > 0.
	If NPV > 0, then Profitability Index > 0.
	If NPV > 0, then IRR > 0.
	If NPV > 0 at the stated cost of capital (i.e., 10%), then NPV will also be > 0 at a cost of capital of 12%.
	If NPV > 0, then a simple sum of the cash inflows of the project will always be greater than the cost of the project (i.e, the year 0 cash flow).