Project a Has an IRR of 15 Percent

question 7

Multiple Choice

Project A has an IRR of 15 percent. Project B has an IRR of 18 percent. Both projects have the same risk. Which of the following statements is most correct?

• A) If the WACC is 10 percent, both projects will have a positive NPV, and the NPV of Project B will exceed the NPV of Project A.
• B) If the WACC is 15 percent, the NPV of Project B will exceed the NPV of Project A.
• C) If the WACC is less than 18 percent, Project B will always have a shorter payback than Project A.
• D) If the WACC is greater than 18 percent, Project B will always have a shorter payback than Project A.
• E) If the WACC increases, the IRR of both projects will decline.

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Definitions:

Pluripotent Stem Cells

Pluripotent stem cells are cells capable of differentiating into any of the three germ layers: ectoderm, mesoderm, and endoderm, which can develop into any cell type of the body.

Germ Layers

The three primary layers of cells (ectoderm, mesoderm, and endoderm) in the early embryo that develop into all organs and tissues of the organism.

Gastrula

Three-layered developmental stage formed by gastrulation.

Sexual Intercourse

The physical act between individuals that involves the reproductive organs and can lead to reproduction in species that reproduce sexually.