Consider two projects, Project P and Project Q, with the following end of year cash flows:
Which of the following statements is correct?
A) The crossover discount rate is less than the internal rate of return of both projects.
B) If the cost of capital is 5 percent, the profitability index of both projects will be less than 1.0.
C) If these two projects are independent and the cost of capital is 6 percent, we should reject both projects.
D) If these two projects are mutually exclusive and the cost of capital is 5 percent, we should accept only Project P.
Correct Answer:
Verified
Q43: Consider the following project information:
Initial outlay =
Q44: We should accept a project if:
A) profitability
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