Question 7

If the required return is 20%, which of the following is incorrect?

If A and B are mutually exclusive projects, project B is preferred

Project A should be accepted

Project B should be accepted

If the initial investment of A is higher than that of B, which of the following is correct?

		Project B can generate more future cash flows
		Project B has a higher profitability index if the required return is 20%
		If A and B are mutually exclusive projects, project A is preferred if the required return is 15%