Lancaster Corp

question 69

Multiple Choice

Lancaster Corp.is considering two equally risky, mutually exclusive projects, both of which have normal cash flows.Project A has an IRR of 11%, while Project B's IRR is 14%.When the cost of capital is 8%, the projects have the same NPV.Given this information, which of the following statements is CORRECT?

• A) If the cost of capital is 9%, Project A's NPV will be higher than Project B's.
• B) If the cost of capital is 6%, Project B's NPV will be higher than Project A's.
• C) If the cost of capital is greater than 14%, Project A's IRR will exceed Project B's.
• D) If the cost of capital is 9%, Project B's NPV will be higher than Project A's.
• E) If the cost of capital is 13%, Project A's NPV will be higher than Project B's.

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Definitions:

Electrocautery

An apparatus used to cauterize tissue with heat from a current of electricity.

Needle Biopsy

A procedure where a small sample of tissue is taken from the body using a thin needle for examination, often to diagnose diseases like cancer.

Aspiration

The act of inhaling a foreign object or substance into the airway or lungs, or a strong desire or ambition for achievement.

Sterile Technique

A set of practices designed to minimize the presence of pathogens and reduce the likelihood of infection.