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Projects A and B are mutually exclusive and have conventional cash flows. The crossover rate is 10% and Project A is preferred at a discount
Projects A and B are mutually exclusive and have conventional cash flows. The crossover rate is 10% and Project A is preferred at a discount rate of 8%. Both projects have a positive NPV if the required return is 10%. Which of the following statements is true? (More than one might be true)
Project B is preferred at a discount rate of 12% |
Project B is preferred at a discount rate of 10% |
The two projects have the same NPV when the required return is 10%. |
Project A is preferred at a discount rate of 10% |
Project A is preferred at a discount rate of 5% |
Project A must have a higher IRR than Project B |
Project B must have a higher IRR than Project A |
Both projects must have an IRR higher than 10% |
Project A is preferred at a discount rate of 15% |
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