Question 14(1 point)

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 ismost likely?

Question 14 options:

Only Statement 1 is correct.

Only Statement 2 is correct.

Both statements are correct.