Project X Has an Internal Rate of Return of 20

question 18

Multiple Choice

Project X has an internal rate of return of 20 percent. Project Y has an internal rate of return of 15 percent. Both projects have a positive net present value. Which of the following statements is most correct?

• A) Project X must have a higher net present value than Project Y.
• B) If the two projects have the same WACC, Project X must have a higher net present value.
• C) Project X must have a shorter payback than Project Y.
• D) Both answers b and c are correct.
• E) None of the above answers is correct.

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Definitions:

Collective

A term referring to a group of individuals who share or are motivated by at least one common issue or interest, or work together to achieve a common objective.

Intergroup Behavior

Intergroup behavior refers to interactions between members of different groups, influenced by their group affiliations, which can lead to conflict or cooperation.

Group Behavior

Refers to how individuals behave when they are part of a group, including ways their decisions, actions, and reactions are influenced by the group’s dynamics and norms.

Emergent Norm Theory

A theory suggesting that norms in a group setting can develop spontaneously and influence the group's behavior.