A Company Is Analyzing Two Mutually Exclusive Projects, S and L

question 63

Multiple Choice

A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below: The company's required rate of return is 12 percent, and it can get an unlimited amount of funds at that rate.What is the IRR of the better project, i.e., the project which the company should choose if it wants to maximize the price of its stock?

• A) 12.00%
• B) 15.53%
• C) 18.62%
• D) 19.08%
• E) 20.46%

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Definitions:

GDDR6

An advanced version of graphics double data rate SDRAM, intended for use in graphics cards, game consoles, and high-performance computing.

GDDR5

A type of DRAM graphics memory that offers higher speeds and bandwidth for graphical processing units (GPUs) compared to its predecessors.

GDDR4

A type of graphics card memory technology designed for higher performance in 3D rendering and gaming applications.

GDDR3

A type of graphics double data rate synchronous dynamic random-access memory, used in graphics cards and gaming consoles for high-speed data transfer.