The NPV and IRR Methods, When Used to Evaluate Two

question 34

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 less than the projects' cost of capital.

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Definitions:

Trade Discount

A discount granted by the supplier to a purchaser of goods for resale.

Trade Discount

A reduction in the retail price provided by a seller to a buyer, often based on the quantity of goods purchased or to encourage prompt payment.

Trade Discount

A deduction from the list price of goods, provided by a seller to a buyer, often based on volume of purchase or early payment.

Trade Discount

A reduction in the listed price of a good or service offered by a seller to a buyer, usually based on the quantity purchased or the buyer's status.