In Comparing Two Projects Using an NPV Profile, at the Point

question 369

Multiple Choice

In comparing two projects using an NPV profile, at the point where the net present value of the projects involved are equal, ______________________.

• A) The IRR of each is equal to zero.
• B) The IRR of each is equal to the cost of capital.
• C) The discount rate that equates them is called the crossover rate.
• D) The projects both have NPVs equal to zero.
• E) The AAR exceeds the cost of capital.

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Definitions:

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The ratio of the number of individuals actively participating in the labor force to the total number of individuals eligible to participate.

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Involves daily or regular activities required to maintain a household, such as cleaning, cooking, and laundry.

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