Projects C and D Are Mutually Exclusive and Have Normal

question 53

Multiple Choice

Projects C and D are mutually exclusive and have normal cash flows.Project C has a higher NPV if the WACC is less than 12%,whereas Project D has a higher NPV if the WACC exceeds 12%.Which of the following statements is CORRECT?

• A) Project D probably has a higher IRR.
• B) Project D is probably larger in scale than Project C.
• C) Project C probably has a faster payback.
• D) Project C probably has a higher IRR.
• E) The crossover rate between the two projects is below 12%.

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Definitions:

Plea Bargaining

A legal process in which a defendant agrees to plead guilty to a lesser charge in exchange for a more lenient sentence or the dropping of other charges.

System of Law

An organized set of legal principles, regulations, and procedures that govern the conduct of a community, region, or nation.

Gathering Evidence

The process of collecting information, data, or facts to support a hypothesis, theory, or legal case.

Examining Witnesses

The process of questioning witnesses in court by both defense and prosecution to establish the facts of the case.