Question

8) Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a required retum of 12 percent. Which of the following statements is MOST correct? A) Project A must have a higher NPV than Project B. B) Both projects have a positive net present value (NPV) C) Project B has a higher profitability index than Project A. D) If the required return were less than 12 percent, Project B would have a higher IRR than Project A. 9) Which of the following statements is MOST correct? A) If a project's internal rate of return (IRR) exceeds the required return, then the project's net present value (NPV) must be negative. Bipr a proiet's profty dx exceed one,then the project' net present valie (NPV) must be positive. C) If Project A has a higher PI than Project B, then Project A must also have a higher NPV calculation implicitly assumes that all cash flows are reinvested at firm's 10) DYI Construction Co. is considering a new inventory system that will cost $750,000. The e payback 2,000 in year two, $150,000 in year three, and $180,000 in year he IRR required rate of return. amounts system is expected to generate positive cash flows over the next four years in the of $350,000 in year one, year two, A) 2.50 years -B) 2.91 years C) 4.00 years D) 3.09 years