The IRR of Normal Project X Is Greater Than the IRR

question 159

True/False

The IRR of normal Project X is greater than the IRR of normal Project Y,and both IRRs are greater than zero.Also,the NPV of X is greater than the NPV of Y at the required rate of return.If the two projects are mutually exclusive,Project X should definitely be selected,and the investment made,provided we have confidence in the data.Put another way,it is impossible to draw NPV profiles that would suggest not accepting Project X.

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Definitions:

Receiving Report

A document used to confirm the receipt of goods delivered, detailing the quantity and condition of the items.

Receiving Department

The section of a company responsible for the acceptance, inspection, and management of incoming goods or materials.

Work in Process

Partially finished goods undergoing manufacture, situated between raw materials and finished products in accounting and inventory.

Direct Materials

Basic substances that can be directly linked to and are essential for the creation of the final product during the manufacturing sequence.