The IRR of Normal Project X Is Greater Than the IRR

question 59

True/False

The IRR of normal Project X is greater than the IRR of normal Project Y, and both IRRs are greater than zero. Also, the NPV of X is greater than the NPV of Y at the cost of capital. If the two projects
are mutually exclusive, Project X should definitely be selected, and the investment made, provided we have confidence in the data. Put another way, it is impossible to draw NPV profiles that would suggest NOT ACCEPTING Project X.

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Definitions:

Software Power

The capability and effectiveness of software in performing its intended functions and tasks efficiently.

Reduction in Force

A corporate strategy involving the reduction of a company's workforce to improve financial performance or adapt to changing market conditions.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise that another party has reasonably and substantially relied on, even if no formal contract exists.

Past Consideration

A promise to give another something of value in return for goods or services rendered and delivered in the past.