Project X's IRR Is 19% and Project Y's IRR Is

question 79

Multiple Choice

Project X's IRR is 19% and Project Y's IRR is 17%.The projects have the same risk and the same lives,and each has constant cash flows during each year of their lives.If the WACC is 10%,Project Y has a higher NPV than X.Given this information,which of the following statements is CORRECT?

• A) The crossover rate must be less than 10%.
• B) The crossover rate must be greater than 10%.
• C) If the WACC is 8%,Project X will have the higher NPV.
• D) If the WACC is 18%,Project Y will have the higher NPV.
• E) Project X is larger in the sense that it has the higher initial cost.

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Definitions:

Hygiene Factors

Elements related to the work environment, such as salary, company policies, and working conditions, that don't inherently motivate but can cause dissatisfaction if inadequate.

Job Satisfaction

The level of fulfillment or contentment one experiences with their job, including aspects like work environment, job duties, and compensation.

Job Dissatisfaction

A negative emotional state resulting from a mismatch between job expectations and the actual realities of the job, often leading to decreased motivation and performance.

Encouraging Eustress

A positive form of stress that motivates and enhances one's ability to cope with life situations.