The IRR of Normal Project X Is Greater Than the IRR

question 47

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:

Social Contract

A theoretical agreement within a society or between the governed and the government, defining and limiting the rights and duties of each.

Relativist

An individual or doctrine emphasizing the belief that points of ethical and moral significance are relative to individual cultures or personal perspectives.

Ethical Perspective

A viewpoint or angle from which ethical concerns and principles are analyzed and considered.

Company Industry

The specific sector or category of the market in which a company operates, characterized by a particular type of business activity or product/service.