Consider Two Projects, X and Y

question 9

Multiple Choice

Consider two projects, X and Y.Project X's IRR is 19% and Project Y's IRR is 17%.The projects have the same risk and the same lives, and each has constant cash flows during each year of their lives.If the cost of capital is 10%, Project Y has a higher NPV than X.Given this information, which of the following statements is CORRECT?

• A) The crossover rate must be greater than 10%.
• B) If the cost of capital is 8%, Project X will have the higher NPV.
• C) If the cost of capital is 18%, Project Y will have the higher NPV.
• D) Project X is larger in the sense that it has the higher initial cost.
• E) The crossover rate must be less than 10%.

Assess the role of financial management in preventing business failure.

Understand the use of financial ratios and industry benchmarks for business analysis.

Grasp the importance of regular financial record keeping and its impact on decision-making.

Comprehend the necessity of cash budgeting and projections for effective financial planning.

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