Projects C and D both have normal cash flows and are mutually exclusive. Project C has a higher NPV if the cost of capital is less than 12%, whereas Project D has a higher NPV if the cost of capital exceeds 12%. Which of the following statements is CORRECT?
A) project d is probably larger in scale than project c.
B) project c probably has a faster payback.
C) project c probably has a higher irr.
D) the crossover rate between the two projects is below 12%.
E) project d probably has a higher irr.
Correct Answer:
Verified
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