Question
Consider two conventional (i.e., normal cash flows) projects, A and B. Project A has an internal rate of return (IRR) of 17 percent. Project B
Consider two conventional (i.e., normal cash flows) projects, A and B. Project A has an internal rate of return (IRR) of 17 percent. Project B has an IRR of 23 percent. Both projects have a cost of capital of 18 percent. Which of the following statements is most correct?
Question 1 options:
Both projects have a positive net present value (NPV).
Project A must have a higher NPV than Project B.
Project A has a negative NPV while project B has a positive NPV.
Accept both projects
Statements a, b, and c are correct.
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Options Futures and Other Derivatives
Authors: John C. Hull
10th edition
013447208X, 978-0134472089
