You are considering two mutually exclusive projects with the following cash ﬂows. Will your choice
between the two projects differ if the required rate of return is 8 percent rather than 11 percent? If
so, what should you do?
A) Yes; Select A at 8 percent and B at 11 percent.
B) Yes; Select B at 8 percent and A at 11 percent.
C) Yes; Select A at 8 percent and select neither at 11 percent.
D) No; Regardless of the required rate, project A always has the higher NPV.
E) No; Regardless of the required rate, project B always has the higher NPV.

Question

You are considering two mutually exclusive projects with the following cash ﬂows. Will your choice
between the two projects differ if the required rate of return is 8 percent rather than 11 percent? If
so, what should you do?  
A) Yes; Select A at 8 percent and B at 11 percent. 
B) Yes; Select B at 8 percent and A at 11 percent. 
C) Yes; Select A at 8 percent and select neither at 11 percent. 
D) No; Regardless of the required rate, project A always has the higher NPV. 
E) No; Regardless of the required rate, project B always has the higher NPV.

Quizplus · Accepted Answer

The Answer of You are considering two mutually exclusive projects with the following cash ﬂows. Will your choice
between the two projects differ if the required rate of return is 8 percent rather than 11 percent? If
so, what should you do?  
A) Yes; Select A at 8 percent and B at 11 percent. 
B) Yes; Select B at 8 percent and A at 11 percent. 
C) Yes; Select A at 8 percent and select neither at 11 percent. 
D) No; Regardless of the required rate, project A always has the higher NPV. 
E) No; Regardless of the required rate, project B always has the higher NPV.

You Are Considering Two Mutually Exclusive Projects with the Following