You Are Considering Two Projects

question 91

Multiple Choice

You are considering two projects.Project A has projected cash flows of $6,500,$4,500,and $2,500 for the next three years,respectively.Project B has projected cash flows of $2,500,$4,500,and $6,500 for the next three years,respectively.Assuming both projects have the same initial cost,you know that:

• A)there are no conditions under which the projects can have equal values.
• B)Project B has a higher net present value than Project A.
• C)Project A is more valuable than Project B given a positive discount rate.
• D)both projects offer the same rate of return.
• E)both projects have equal net present values at any discount rate.