Canada Corp

question 8

Multiple Choice

Canada Corp.'s management has determined that two mutually exclusive projects have the following NPV:Project A NPV $5,000Project B NPV $6,000Which best describes the correct managerial decision given the information above?

• A)Decline both projects since both projects must have an NPV greater than $10,000.
• B)Accept both projects since the NPV of A will offset any potential losses resulting from B.
• C)Accept A and decline B since they both have positive NPVs.
• D)Accept B, and reject A, since project B has a lower NPV than project A.