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Question 3 (10 points) 4. Listen (Estimated time allowance: 12 minutes) Use the information below. All projects (A to G) are 7-year projects. NPV -

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Question 3 (10 points) 4. Listen (Estimated time allowance: 12 minutes) Use the information below. All projects (A to G) are 7-year projects. NPV - Net present value. IRR = internal rate of return. MIRR- modified internal rate of return. Pl - profitability index. Criteria: Project A Project_B Project C Project D Project E Project F Project G NPV- $137,083 $31,290 $6,016 $7.647 ($584) $12,521 $9,214 IRR- 31.80% 48.34% 12.03% 11.30% 9.94% 26.79% 37.87% MIRR- 18.52% 23.52% 10.62% 10.59% 9.97% 23.53% 20.76% PIE 1.69 2.25 1.040 1.038 1.00 2.25 1.92 The discounting rate (r) is 10%. Which of the following 6 statements are true (there are several, select all that are correct). Consider each statement on its own separate from the others listed: 1) If all projects are mutually exclusive, under the NPV rule only project A should be taken 2) If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects A, D, and F should be undertaken 3) If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects B, C, and G should be undertaken 4) If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken 5) If all projects are independent, under the NPV rule, all projects should be taken 6) If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the NPV rule projects A, D, and F should be undertaken

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