A large integrated delivery system (IDS) in NJ is considering the acquisition of a stand-alone hospital in its market. The IDS has determined it would need to spend $100 million on capital improvements on the stand-alone hospital in order to update the facilities, update the Operating Rooms, and improve all other clinical technology. The CFO of the IDS prepared a 10-year cash flow analysis of the acquisition which resulted in a negative NPV, but an IRR that exceeded their 12% hurdle rate. Which of the following statements is most correct about the analysis?

A. It's not possible to have a negative NPV and an IRR that exceeds the hurdle rate for the same project.

B. A negative NPV can occur when cash flow projections produce negative results in certain years, especially the outer years, and still result in an acceptable IRR.

C. The decision to proceed with the acquisition shoul dbe soley base don the IRR.

D. The IDS should reconsider its hurdle rate expectations so a positive NPV occurs.