Westchester Corp

question 81

Multiple Choice

Westchester Corp.is considering two equally risky,mutually exclusive projects,both of which have normal cash flows.Project A has an IRR of 11%,while Project B's IRR is 14%.When the WACC is 8%,the projects have the same NPV.Given this information,which of the following statements is correct?

• A)If the WACC is 13%, Project A's NPV will be higher than Project B's.
• B)If the WACC is 9%, Project A's NPV will be higher than Project B's.
• C)If the WACC is 6%, Project B's NPV will be higher than Project A's.
• D)If the WACC is 9%, Project B's NPV will be higher than Project A's.

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Definitions:

Path-Goal Leadership Theory

A theory which states that a leader's behavior is contingent to the satisfaction, motivation, and performance of their subordinates, and involves adjusting leadership styles based on situational demands and follower characteristics.

Directive Leadership

A management style where leaders closely control and instruct the work of their employees, often dictating the what, how, and when of tasks.

Path-Goal Theory

A leadership theory that suggests leaders adjust their behaviors and styles to align with employee motivations, obstacles, and goals to enhance performance and satisfaction.

Path-Goal Theory

A leadership theory that suggests a leader's behavior is contingent to the satisfaction, motivation, and performance of her or his subordinates.