You Are Considering Two Independent Projects with the Following Cash $10 \%$

question 107

Multiple Choice

You are considering two independent projects with the following cash flows. The required return for both projects is $10 \%$ . Given this information, which one of the following statements is correct?

• A)You should accept project B since it has the higher IRR and reject project A because you Can not accept both projects.
• B)You should accept project A because it has the lower NPV and reject project B.
• C)You should accept project A because it has the higher NPV and you can not accept both Projects.
• D)You should accept project B because it has the higher IRR and reject project A.
• E)You should accept both projects if the funds are available to do so since both NPV's are > 0)

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Definitions:

Cheesecake

A sweet dessert consisting of one or more layers, with the main and thickest layer containing a mixture of soft, fresh cheese, eggs, and sugar.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.

Value-Added Tax

A type of consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.

Production

The method of blending different tangible and intangible inputs (like designs and expertise) to create products for use.