Consider Two Projects,X and Y

question 93

Multiple Choice

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

---

Definitions:

Social Status

The position or rank of a person or group within the society based on various factors such as wealth, occupation, education, and family lineage.

Age

A measurement of the time an individual has lived, typically expressed in years.

Edward Hall

An anthropologist known for his studies on the cultural aspects of social interaction, including personal space and communication patterns.

Interpersonal Distance

The physical space between individuals during social interaction, which can reflect their relationship's intimacy level or social norms.