Project X's IRR Is 19% and Project Y's IRR Is

question 79

Multiple Choice

Project X's IRR is 19% and Project Y's IRR is 17%.The projects have the same risk and the same lives,and each has constant cash flows during each year of their lives.If the WACC is 10%,Project Y has a higher NPV than X.Given this information,which of the following statements is CORRECT?

• A) The crossover rate must be less than 10%.
• B) The crossover rate must be greater than 10%.
• C) If the WACC is 8%,Project X will have the higher NPV.
• D) If the WACC is 18%,Project Y will have the higher NPV.
• E) Project X is larger in the sense that it has the higher initial cost.

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Definitions:

Renal Plasma

The portion of the blood that flows through the kidneys and is involved in the filtration process to produce urine.

Tubular Reabsorption

Water and solutes move from the filtrate inside a kidney tubule into the peritubular capillaries.

Proximal Tubule

A segment of the nephron in the kidney where a major portion of the reabsorption of water, ions, and nutrients from the filtrate back into the bloodstream occurs.

Glomerulus

A network of capillaries located at the beginning of a nephron in the kidney, where blood filtration takes place.