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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 0.999 2.25 1.92 The discounting rate (r) is 10%. Which of the following 10 statements are true (there are several, select all that are correct). Consider each statement on its own separate from the others listed: 1 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 Pl rule projects A, D, and F should be undertaken 2 If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken 3 If only projects E and Fare mutually exclusive, under the NPV rule only project A should be taken 4 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 5 If all projects are mutually exclusive, under the Pl rule only projects B and F should be taken 6 If projects A & B are mutually exclusive, projects C and D are also mutually exclusive (all others are independent), under the IRR rule projects B, C, and G should be undertaken If all projects are independent, under the Pl rule, all projects should be taken 8 If all projects are independent, under the IRR rule projects A, B, C, D, F and G should be taken 9 If all projects are mutually exclusive, under the IRR rule only project B should be taken 10 If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects Fand 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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