Question
Two mutually exclusive projects, A and B, have NPV of $2.5m and $2.9m respectively. However, Project A's IRR is greater than Project B's IRR. The
Two mutually exclusive projects, A and B, have NPV of $2.5m and $2.9m respectively. However, Project A's IRR is greater than Project B's IRR. The cross-over rate for the projects' NPV profiles is 12%. Which of the following statements is true?
1) The projects' cost of capital is greater than 12%
2) The projects' cost of capital is less than 12%
3) The projects' cost of capital is equal to 12%
4) Insufficient Information
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Financial Accounting A Business Process Approach
Authors: Jane L Reimers
2nd Edition
131473867, 978-0131473867
