Project a Has an IRR of 20% While Project B

question 56

Multiple Choice

Project A has an IRR of 20% while Project B has an IRR of 30%.Under which of the following situations might you be inclined to select Project A,assuming the projects to be mutually exclusive,lending projects?

• A) Project A is riskier.
• B) Project A requires a smaller initial investment.
• C) Project A requires a larger initial investment.
• D)Project A requires cash outflows in the final period.

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Definitions:

Gas Exchange

The process by which oxygen is taken in and carbon dioxide is released out, occurring in the lungs and tissues or in the cells and environment for organisms.

Transpiration

The process by which plants absorb water through the roots and then give off water vapor through pores in their leaves.

Perspiration

The process of sweating, through which the body releases excess heat and water.

Transduction

A process in genetics where bacterial DNA is transferred from one bacterium to another by a virus.