Business, 21.04.2020 15:50 jamesleecy06
A company is choosing between two projects. The larger project has an initial cost of $100,000, annual cash flows of $30,000 for 5 years, and an IRR of 15.24%. The smaller project has an initial cost of $51,600, annual cash flows of $16,000 for 5 years, and an IRR of 16.65%. The projects are equally risky. Which of the following statements is CORRECT?
a. Since the smaller project has the higher IRR, the two projects’ NPV profiles cannot cross, and the smaller project’s NPV will be higher at all positive values of WACC.
b. Since the smaller project has the higher IRR, the two projects’ NPV profiles will cross, and the larger project will look better based on the NPV at all positive values of WACC.
c. If the company uses the NPV method, it will tend to favor smaller, shorter-term projects over larger, longer-term projects, regardless of how high or low the WACC is.
d. Since the smaller project has the higher IRR but the larger project has the higher NPV at a zero discount rate, the two projects’ NPV profiles will cross, and the larger project will have the higher NPV if the WACC is less than the crossover rate.
e. Since the smaller project has the higher IRR and the larger NPV at a zero discount rate, the two projects’ NPV profiles will cross, and the smaller project will look better if the WACC is less than the crossover rate.
Answers: 2
Business, 22.06.2019 05:40
According to the philosopher immanuel kant, the right of employees to know the nature of the job they are being hired to do and the obligation of a company not to deceive them in this respect is mainly reflective of the basic right of . privac yb. free consentc. freedom of speechd. freedom of consciencee. first refusal
Answers: 1
Business, 22.06.2019 22:30
Experts are particularly concerned about four strategic metal resources that are important for the u.s. economy and military strength, and that must be imported. what percentage does the u.s. import? *
Answers: 2
Business, 22.06.2019 22:50
Suppose that the u.s. dollars-mexican pesos exchange rate is fixed by the u.s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs.which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u.s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u.s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u.s. dollars.
Answers: 1
A company is choosing between two projects. The larger project has an initial cost of $100,000, annu...
Spanish, 23.07.2019 20:00
History, 23.07.2019 20:00
Arts, 23.07.2019 20:00
Biology, 23.07.2019 20:00
History, 23.07.2019 20:00
Mathematics, 23.07.2019 20:00
Computers and Technology, 23.07.2019 20:00
Chemistry, 23.07.2019 20:00
Business, 23.07.2019 20:00
Mathematics, 23.07.2019 20:00
History, 23.07.2019 20:00
History, 23.07.2019 20:00
Physics, 23.07.2019 20:00