Project X's IRR Is 19% and Project Y's IRR Is

question 79

Multiple Choice

Project X's IRR is 19% and Project Y's IRR is 17%.The projects have the same risk and the same lives,and each has constant cash flows during each year of their lives.If the WACC is 10%,Project Y has a higher NPV than X.Given this information,which of the following statements is CORRECT?

• A) The crossover rate must be less than 10%.
• B) The crossover rate must be greater than 10%.
• C) If the WACC is 8%,Project X will have the higher NPV.
• D) If the WACC is 18%,Project Y will have the higher NPV.
• E) Project X is larger in the sense that it has the higher initial cost.

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Definitions:

Panic Disorders

Refers to a type of anxiety disorder characterized by sudden and repeated episodes of intense fear accompanied by physical symptoms.

Comorbidity

The concurrent existence of multiple diseases or medical conditions within a patient.

Physiological Factors

Elements of the body's physical functioning that affect processes such as growth, metabolism, and responses to stimuli.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about a variety of things, which is not proportional to the actual source of worry.