Company Is Choosing Between Two Projects

question 105

Multiple Choice

company is choosing between two projects.The larger project has an initial cost of $100,000, annual cash flows of $30,000 for 5 years, and an IRR of 15.24%.The smaller project has an initial cost of $50,000, annual cash flows of $16,000 for 5 years, and an IRR of 16.63%.The projects are equally risky.Which of the following statements is CORRECT?

• A)Since the smaller project has the higher IRR, the two projects' NPV profiles cannot cross, and the smaller project's NPV will be higher at all positive values of WACC.
• B)Since the smaller project has the higher IRR, the two projects' NPV profiles will cross, and the larger project will look better based on the NPV at all positive values of WACC.
• C)If the company uses the NPV method, it will tend to favor smaller, shorter-term projects over larger, longer-term projects, regardless of how high or low the WACC is.
• D)Since the smaller project has the higher IRR but the larger project has the higher NPV at a zero discount rate, the two projects' NPV profiles will cross, and the larger project will have the higher NPV if the WACC is less than the crossover rate.
• E)Since the smaller project has the higher IRR and the larger NPV at a zero discount rate, the two projects' NPV profiles will cross, and the smaller project will look better if the WACC is less than the crossover rate.

Recognize the importance of team dynamics and role distributions within sales teams for effective market penetration.

Understand various methods and theories behind sales force sizing and territory management.

Realize the significance of ethical standards and relationship management in maintaining and enhancing customer relations.

Identify the key stages and roles within the personal-selling process.

---

Definitions:

Waveforms

Graphical representations of varying signal voltages in electronics or patterns of oscillatory systems.

Midway

An intermediate point or place, often used to describe a location or stage between the beginning and end of a process or journey.

Fourth Intercostal Space

The space between the fourth and fifth ribs, an important reference point in medical examinations and procedures.

Left Margin

The space on the left side of a page or text that sets the boundary for written or printed content.