Question
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. PI = profitability index.
| Criteria: | Project_A | Project_B | Project_C | Project_D | Project_E | Project_F | Project_G |
| NPV= | $137,083 | $31,290 | $6,016 | $7,647 | ($584) | $12,521 | $9,214 |
| IRR= | 31.80% | 48.34% | 12.03% | 11.30% | 9.94% | 26.79% | 37.87% |
| MIRR= | 18.52% | 23.52% | 10.62% | 10.59% | 9.97% | 23.53% | 20.76% |
| PI= | 1.69 | 2.25 | 1.040 | 1.038 | 1.00 | 2.25 | 1.92 |
The discounting rate (r) is 10%.
Which of the following 10 statements are false - incorrect (there are several, select all that apply). Consider each statement on its own separate from the others listed:
Question 9 options:
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| If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F and G should be taken |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects A, D, and F should be undertaken |
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| If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the NPV rule projects A, D, and F should be undertaken |
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| If all projects are mutually exclusive, under the IRR rule only project B should be taken |
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| If all projects are mutually exclusive, under the NPV rule only project A should be taken |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the MIRR rule projects B, C, and F should be undertaken |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects B, C, and G should be undertaken |
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| If all projects are independent, under the NPV rule, all projects should be taken |
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| If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken |
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Originate Motivate Innovate 7 Steps For Building A Billion Dollar Network
Authors: Shelly Omilade Bell, Sonya Renee Taylor
1st Edition
1119900549, 978-1119900542
