Suppose Project a Has an IRR of 10 Percent and Project

question 50

Multiple Choice

Suppose project A has an IRR of 10 percent and project B has an IRR of 20 percent.One can then conclude that:

• A) Project A is preferred to B
• B) Project A has a negative NPV while project B has a positive NPV.
• C) Project B has a negative NPV while project A has a positive NPV.
• D) It is impossible to rank the two projects without further information.

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Definitions:

Psychomotor Retardation

A slowing-down of thought and a reduction of physical movements in an individual, often an indicator of major depression or other psychiatric disorders.

Obsessive-compulsive Disorder

A mental health disorder characterized by uncontrollable, recurring thoughts (obsessions) and behaviors (compulsions) that the individual feels the urge to repeat.

Panic Disorder

A psychiatric disorder characterized by recurrent, unexpected panic attacks and ongoing concern about having more attacks or changing behavior to avoid them.

Somatic Disorder

A mental disorder that manifests as physical symptoms which are not fully explained by a general medical condition, drug use, or another mental disorder.