Consider Two Mutually Exclusive Projects a & B

question 9

Multiple Choice

Consider two mutually exclusive projects A & B.If you subtract the cash flows of opportunity B from the cash flows of opportunity A,then you should:

• A)take opportunity A if the regular IRR exceeds the cost of capital.
• B)take opportunity A if the incremental IRR exceeds the cost of capital.
• C)take opportunity B if the regular IRR exceeds the cost of capital.
• D)take opportunity B if the incremental IRR exceeds the cost of capital.

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Definitions:

Tricyclic Drug

A class of antidepressant medication characterized by its chemical structure, which includes three rings; used to treat depression and certain other conditions.

Side Effects

Unintended reactions or outcomes that occur in addition to the desired therapeutic effect of a medication or treatment.

Depression

A mental health disorder characterized by persistent sadness, lack of interest or pleasure in activities, and can significantly impair daily functioning.

Benzodiazepines

A class of psychoactive drugs used primarily for treating anxiety, insomnia, and several other conditions, known for their sedative effects.