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Consider the following statements: Statement 1: When considering two mutually exclusive projects with unequal lives, the project with the higher equivalent annual yield (EAA) should

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Consider the following statements: Statement 1: When considering two mutually exclusive projects with unequal lives, the project with the higher equivalent annual yield (EAA) should always be chosen. Statement 2: Using the company's WACC as the discount rate when evaluating a project that has higher-than-average risk will result in an inflated NPV. Which of the following is most likely? Only Statement 1 is correct. Only Statement 2 is correct. Both statements are correct

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