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The IRR of Normal Project X Is Greater Than the IRR

question 47

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The IRR of normal Project X is greater than the IRR of normal Project Y, and both IRRs are greater than zero.Also, the NPV of X is greater than the NPV of Y at the cost of capital.If the two projects are mutually exclusive, Project X should definitely be selected, and the investment made, provided we have confidence in the data.Put another way, it is impossible to draw NPV profiles that would suggest not accepting Project X.


Definitions:

Rhetorical Situation

The context of a rhetorical act, made up of a rhetor, an audience, and a message, that influences the strategy and effectiveness of communication.

Purpose

The reason for which something is done or created, or for which something exists.

Circumstances

The conditions or facts affecting the event or situation at hand.

Arc

A curve with a continuous part of a circle or other curved line.

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