Projects C and D Are Mutually Exclusive and Have Normal

question 42

Multiple Choice

Projects C and D are mutually exclusive and have normal cash flows.
Project C has a higher NPV if the WACC is less than 12%, whereas Project D has a higher NPV if the WACC exceeds 12%. Which of the following statements is CORRECT?

• A) Project D probably has a higher IRR.
• B) Project D is probably larger in scale than Project C.
• C) Project C probably has a faster payback.
• D) Project C probably has a higher IRR.
• E) The crossover rate between the two projects is below 12%.

---

Definitions:

Tolerance

The willingness to accept and permit beliefs or practices that one may disagree with or find undesirable.

Constantly Comparing

The habitual act of comparing oneself to others in various aspects of life.

Motivate

To provide a reason, incentive, or encouragement for someone to act or behave in a particular way.

Achievement

Achievement refers to something accomplished, particularly by superior ability, special effort, great courage, or a notable feat, often recognized because of its significance.