You Are Comparing Two Mutually Exclusive Projects

question 26

Multiple Choice

You are comparing two mutually exclusive projects. The crossover point is 12.3 percent. You have determined that you should accept project A if the required return is 13.1 percent. This implies you should: 

• A) always accept Project A. 
• B) be indifferent to the projects at any discount rate above 13.1 percent. 
• C) always accept Project A if the required return exceeds the crossover rate. 
• D) accept Project B only when the required return is equal to the crossover rate. 
• E) accept Project B if the required return is less than 13.1 percent. 

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Definitions:

Slope

The measure of the steepness or incline of a line, typically calculated as the ratio of the vertical change to the horizontal change.

Line

In a geometric sense, an infinitely long, straight figure with no thickness, extending in both directions and defined by a set of points that align.

Labor Force Participation

The ratio of the labor force to the total working-age population, indicating the percentage of the population that is either employed or actively seeking employment.

Slope

The measure of the steepness or incline of a line or surface, often expressed as a ratio of rise to run or as an angle in degrees.