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:

Social Security Benefits

Payments made to eligible individuals (retirees, disabled workers, and their families) from the Social Security program, funded by Social Security taxes.

Need-Based

A criteria or qualification that is determined by the applicant's financial need or income level, often used for financial aid or grants.

Mortality Rate

A measure of the number of deaths in a particular population, scaled to the size of that population, per unit of time.

Social Security Retirement Benefit

A government payment program that provides financial assistance to people who are retired from work.