12 When projects are mutually exclusive, selection should be made according to the project with the: A longer life. B larger initial size. C highest NPV. D highest IRR. A D O O B O U O
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- A certain project has MARR= 15% . Ali is the project manager and wants to select the best appropriate alternative among alternative A with i* = 12% , and alternative B with i*= 12% . Which is the best alternative to consider?Given the following two mutually exclusive projects, always choose Project A (the project with a higher IRR). Project NPV IRR A $100 10.5% B $150 9.5% Group of answer choices True False29....When using the NPV method the decision making rationale includes the following (select all that apply): a.If projects are mutually exclusive, accept the project with the highest positive NPV. b.If projects are independent, accept if the project NPV<0. c.If projects are independent, accept if the project NPV>0 d.If the projects are mutually exclusive, accept the project with lowest NPV.
- When evaluating a project, the best metrics to use are: Question 42 options: NPV and payback period SVA and NRR Independent and exclusive NPV and IRR FASB and PIAnswer this question as it is pertaining to two MUTUALLY EXCLUSIVE projects on the following figure. Given r=6%, which project would you choose if you decide to use the internal rate of return (IRR) as the criterion? Group of answer choices Project A Project B Neither Eithertable is given below : attached image g) If projects are mutually exclusive, which project would you accept? i) at 5% ii) at 15% h) If projects are independent (not mutually exclusive), which project(s) would you accept? i) at 5% ii) at 15%
- Answer this question as it is pertaining to two MUTUALLY EXCLUSIVE projects on the following figure. If r=6%, which project would you choose by using the net present value (NPV) as the criterion? Group of answer choices Project A Project B Neither Eithera. Calculate the projects’ NPVs, IRRs, MIRRs, regular paybacks, and discounted paybacks.b. If the two projects are independent, which project(s) should be chosen?c. If the two projects are mutually exclusive and the WACC is 10%, which project(s)should be chosen?d. Plot NPV profiles for the two projects. Identify the projects’ IRRs on the graph.e. If the WACC was 5%, would this change your recommendation if the projects weremutually exclusive? If the WACC was 15%, would this change your recommendation?Explain your answers.f. The crossover rate is 13.5252%. Explain what this rate is and how it affects the choicebetween mutually exclusive projects.g. Is it possible for conflicts to exist between the NPV and the IRR when independentprojects are being evaluated? Explain your answer.h. Now look at the regular and discounted paybacks. Which project looks better whenjudged by the paybacks?i. If the payback was the only method a firm used to accept or reject projects, what paybackshould it…A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$350 $65 $65 $65 $210 $210 Project 2 -$400 $250 $250 $145 $145 $145 Which project would you recommend? Select the correct answer. a. Neither Project 1 nor 2, since each project's NPV < 0. b. Both Projects 1 and 2, since both projects have NPV's > 0. c. Project 1, since the NPV1 > NPV2. d. Both Projects 1 and 2, since both projects have IRR's > 0. e. Project 2, since the NPV2 > NPV1.
- A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$450 $50 $50 $50 $200 $200 Project 2 -$550 $200 $200 $150 $150 $150 Which project would you recommend? Select the correct answer. a. Both Projects 1 and 2, since both projects have IRR's > 0. b. Neither Project 1 nor 2, since each project's NPV < 0. c. Both Projects 1 and 2, since both projects have NPV's > 0. d. Project 1, since the NPV1 > NPV2. e. Project 2, since the NPV2 > NPV1.True or False The concept of individual projects stems from the B/C ratio each project has to offer. Once it is feasible (i.e., BC >1), MEAs are born.Consider the following two mutually exclusive investment projects: Which project would you select if you used the infinite planning horizon withproject repeatability likely (same costs and benefits) based on the PW criterion? Assume that i = 12%.