Moving to another question will save this rosponsn. tion 8 She determines that b

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Moving to another question will save this rosponsn. tion 8 She determines that both are accoptable, Based on this information, which of the tollowing statements is incoret Susan is evailuating two mutualy exolusive capital projects. O Both projects have net present values that are greater than zero. OThe projects' internal rates of return must be greater than the firm's required rate of return O Both projects should be purchased. O If the fim purchases either project, the value of the firm is expected to increase projects' internal rates of return muast be greater than the tims reciuired rate of a) Moving to another question wil save this response. MacBook Air

Explanation / Answer

Susan is evaluating two mutually exclusive capital projects. she determines that both are acceptable. based on this information. which of the following statements is incorrect =

ANSWER = c) Both projects should be purchased

Project should be accepted only if NPV is greater than zero and required rate of return is greater than firm's required rate of return. And if firm purchases either project, the value of firm is expected to increase as the net cash flow from project will be added to firm's cash flow

For mutually exclusive projects, the firm's purhases either of project and not both.

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