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An analyst has gathered the following data about two projects, each with a 12% cost of capital: Project Y Project Z Initial cost $15,000 $20,000
An analyst has gathered the following data about two projects, each with a 12% cost of capital: Project Y Project Z Initial cost $15,000 $20,000 Life 5 years 4 years Cash inflows $5,000/year $7,500/year 22. Which of the following statements about project Y is least accurate? A. The discounted payback period is 3 years. O B. The IRR of the project is 19.86%; accept the project C. The NPV of the project is +$3,024; accept the project O D. None of the above. 24. If the projects are mutually exclusive, the company should: * O A. Reject both projects. O B. Accept project Y and reject project Z. O C. Reject project Y and accept project Z. O D. Accept both projects. O E. None of the above 25. Which of the following statements about NPV and IRR is least accurate?* O A. The IRR can be positive even if the NPV is negative. B. When the IRR is equal to the cost of capital, the NPV will be Zero. C. The NPV will be positive if the IRR is less than the cost of capital. D. NPV assumes the cash flows.can be reinvested at the project's cost of capital. O E. None of the above
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