Homework Answers
Answer :
| NPV and IRR approaches use different reinvestment rate assumptions and | ||||||||||||
| so there can be a conflict in project acceptance when mutually exclusive projects are considered. | ||||||||||||
| Reinvestment at the WACC is the superior assumption, | ||||||||||||
| so when mutually exclusive projects are evaluated the NPV approach should be used for the capital budgeting decision. |
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The reason is the NPV and IRR approaches use different reinvestment rate assumptions so there can...
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First Blank: always, sometimes, never Second Blank: IRR, MIRR, required rate of return Third Blank: IRR,...
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a) Neither
b) Project A
c) Project B
d) Both Projects A or B
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be accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
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assumption and so both approaches reach the same...
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