If capital budgeting projects are independent: a. A project accepted by IRR method will be rejected...
If capital budgeting projects are independent:
a. A project accepted by IRR method will be rejected by NPV
b.A project accepted by IRR will always be accepted by NPV
c.A project accepted by IRR may sometimes be accepted by NPV
d. a or b depending on the discount rate
Homework Answers
The correct answer is option c. A project accepted by IRR may sometimes be accepted by NPV
If the project that is accepted by IRR rule has an NPV greater than the rejected project based on IRR rule, then it is accepted by NPV rule as well.
If the project that is accepted by IRR rule has an NPV lower than the rejected project based on IRR rule, then it is rejected by NPV rule.
Option A is incorrect for the same reason.
Option b is incorrect because a project accepted by IRR rule may be rejected by NPV rule.
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If capital budgeting projects are independent:
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If the projects were independent, which project(s) would be accepted according to the IRR method? a)...
If the projects were independent, which project(s) would be
accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
If the projects were mutually exclusive, which project(s) would
be accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
The reason is
a) TheNPV and IRR approaches use the same reinvestment rate
assumption and so both approaches reach the same...
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If the projects were independent, which project(s) would be
accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
If the projects were mutually exclusive, which project(s) would
be accepted according to the IRR method?
a) Neither
b) Project A
c) Project B
d) Both Projects A or B
The reason is
a) TheNPV and IRR approaches use the same reinvestment rate
assumption and so both approaches reach the same...
please explain! thank you
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