NPV and IRR Methods, When Used to Evaluate Two Equally

question 45

True/False

NPV and IRR methods, when used to evaluate two equally risky but mutually exclusive projects, will lead to different accept/reject decisions and thus capital budgets if the cost of capital at which the projects' NPV profiles cross is less than the projects' cost of capital.

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Definitions:

Pie Chart

A circular statistical graphic divided into slices to illustrate numerical proportions, where the arc length of each slice is proportional to the quantity it represents.

Whole

Entire or complete, without missing parts.

Individual Values

Unique numerical or qualitative characteristics that distinguish one entity from another.

Intersection

The point or set of points where two or more paths, lines, or surfaces cross each other, often used in mathematics and geography.