Two Projects Being Considered Are Mutually Exclusive and Have the Following

question 42

Multiple Choice

Two projects being considered are mutually exclusive and have the following projected cash flows: If the required rate of return on these projects is 10 percent,which would be chosen and why?

• A) Project B because of higher NPV.
• B) Project B because of higher IRR.
• C) Project A because of higher NPV.
• D) Project A because of higher IRR.
• E) Neither,because both have IRRs less than the required return.

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Definitions:

Behavioral Learning

The process by which individuals change their behavior based on the consequences of past actions, through processes such as conditioning and reinforcement.

Cognitive Learning

A process of acquiring new knowledge and understanding through thought, experiences, and the senses.

Scientific Method

A systematic, logical approach used in scientific research to formulate, test, and validate hypotheses through experimentation and observation.

Attitude Formation

The process by which individuals develop their outlook and opinions towards objects, people, or events based on experience and information.