Question: 5. Projects A and B are equally risky, mutually exclusive projects with normal cash flows. Project A has an IRR of 15%, while Project Bs

5. Projects A and B are equally risky, mutually exclusive projects with normal cash flows. Project A has an IRR of 15%, while Project Bs IRR is 12%. The two projects have the same NPV when the WACC is 10%. Which of the following statements is CORRECT?

a. If the WACC is 9%, Project A will have the higher NPV.

b. Project A is probably larger in scale

c. If the WACC is 13%, Project B will have a negative NPV.

d. If the cost of capital is 9%, Project B will have a higher profitability index

Please answer with explanation and correctly. I have answer sheet with me. wrong answer will give you a thumb down.

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