QUESTION 21 You just won the lottery! You can either take half of the S65,000,000 in a lump sum today Or you can take yearly payments of $3,000,000 for 25 years (at the begiming of each year). Which option has a higher value to you if you can earn 8 percent per year on your investments? You would prefer the lump sum because its present value is $380,165 higher than the present value of the payments. You would prefer the payments since their present value is $2,086,275 higher than the lump sum present value. OA OB. You would prefer the payments since their present value is $1,273,033 higher than the lump sum present value. OC. OD. You would prefer the lump sum because its present value is $3,032,261 higher than the present value of the payments. O E. None of the other choices are within $1,000 of the correct difference. QUESTION 25 Draw the projects' NPV profiles in the space provided below. Which of the following statements is most FALSE? (Remember, these projects are mutually exclusive.) The projects' NPV profiles cross at 13.08%. OA. Project A crosses the vertical axis at $2,600. OB. OC. When Project A has an NPV of $1,315.99, the company would be indifferent between the two projects. OD Project B would be more desirable than Project A with a cost of capital between 0% and the crossover rate. The firm's cost of capital has to be to the left of the crossover. OE