Question 3

Which one of the following statements is NOT always correct?

Group of answer choices

Projects with unconventional cash flows will have multiple internal rates of return.

If two projects are mutually exclusive, you should select the project with the highest internal rate of return

The profitability index is the expected dollar return per dollar spent on a given project.

When the internal rate of return is greater than the required return, the net present value is positive.

A shorter payback period is preferred over a longer payback period.

Question 4

You are using a net present value profile to compare project "Awesome" and project "Boring," which are mutually exclusive. You find a crossover point of 7%. If you decide to use 7% as your required rate of return, which of the answer choices is most likely to be correct.

Group of answer choices

The net present value for project "Awesome" equals the net present value for project "Boring."

The internal rate of return for project "Awesome" and project "Boring" both equal zero.

The internal rate of return for project "Awesome" equals the internal rate of return for project "Boring."

The internal rate of return for project "Awesome" and project "Boring" both equal the crossover point.

The net present value for project "Awesome" and project "Boring" both equal zero.