Capital Budgeting. Whenever the NPV and IRR lead to a different capital budgetin
ID: 2723558 • Letter: C
Question
Capital Budgeting. Whenever the NPV and IRR lead to a different capital budgeting decision for mutually exclusive projects,
A.the projects' cost of capital is less than the crossover rate
the projects' cost of capital is more than the crossover rate
the scale of the two projects must be different
the timing of the projects' cash flows must be different
the projects have unequal lives
A.the projects' cost of capital is less than the crossover rate
B.the projects' cost of capital is more than the crossover rate
C.the scale of the two projects must be different
D.the timing of the projects' cash flows must be different
E.the projects have unequal lives
Explanation / Answer
The correct answers are A. The project's cost of capital is less than the crossover rate and
D. the timing of the projects'cash flows must be different
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