The NPV and IRR Methods,when Used to Evaluate Two Equally

question 7

True/False

The 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 greater than the crossover rate.

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Definitions:

Rational Assessment

The evaluation of situations or solving problems based on logic and reasoning, often involving critical thinking and analysis.

Hyperopia

In marketing, refers to a consumer's tendency to prioritize long-term benefits over immediate gratification, opposite of myopia. In vision, it is farsightedness.

Habitual Decision Making

The process of making choices that are consistent and routine, often without much thought, typically based on past behaviors and patterns.

Sunk-Cost Fallacy

Misguided reasoning that further investment is warranted on something simply because the resources already invested will otherwise be lost, without regard for future costs and benefits.