Projects a and B Are Mutually Exclusive and Have Normal

question 1

Multiple Choice

Projects A and B are mutually exclusive and have normal cash flows.Project A has an IRR of 15% and B's IRR is 20%.The company's WACC is 12%,and at that rate Project A has the higher NPV.Which of the following statements is CORRECT?

• A) The crossover rate for the two projects must be less than 12%.
• B) Assuming the timing pattern of the two projects' cash flows is the same,Project B probably has a higher cost (and larger scale).
• C) Assuming the two projects have the same scale,Project B probably has a faster payback than Project A.
• D) The crossover rate for the two projects must be 12%.
• E) Since B has the higher IRR,then it must also have the higher NPV if the crossover rate is less than the WACC of 12%.

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Definitions:

Donald L. Kirkpatrick

An American professor and consultant who developed the Kirkpatrick Model for evaluating the effectiveness of training programs.

Training Program Evaluation

A process of assessing the effectiveness and impact of training programs on participants' skills, knowledge, and performance.

Training Effectiveness

The measure of how beneficial training programs are in improving the performance and skills of individuals or groups.

Title VII

A provision of the Civil Rights Act of 1964 that prohibits employment discrimination based on race, color, religion, sex, or national origin.