Michael Lynch is the CEO of a large company in the energy sector. He will meet with the board of directors next week, and in the meeting, he needs to present his recommendations of these two projects:

Project A

Year $012$

Cash flows $-1003585$

Project B

Year $012$

Cash flows $-1002595$

Assume that his assistant has told him that the estimated cost of capital for both projects is $10\%.$ Also assume that Michael relies on both NPV rule and IRR rule, and if there is a conflict between the two rules, he will choose the NPV rule. Which of the following statements is NOT correct?

a$)$ If the two projects are independent of each other, then he should

recommend to accept both projects.

b$)$ If the two projects are mutually exclusive of each other, then he should

recommend to only accept Project A$.$

c$)$ There are no conflicts between the NPV rule and IR rule in this case, regardless of whether the two projects are independent or mutually exclusive of each other.

d$)$ IRR of Project A is higher than IRR of Project B$.$

e$)$ None of the above. Following the previous question of Michael Lynch$\text{'}$s consideration of the two projects. Which of the following statements is CORRECT if the cost of capital is changed to $11\%?$

If the two projects are independent of each other, then he should recommend to accept both projects.

B$)$ If the two projects are mutually exclusive of each other, then he should

recommend to only accept Project A$.$

C$)$ There are conflicts between the MPV rule and IR rule in this case, and his

recommendations would be dependent on whether the two projects are

independent or mutually exclusive of each other.

D$)$ Projet Ahas asteper NPV profile cuve than Project B$.$

E$)$ None of the above.