Question: All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of
All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. PI = profitability index. Criteria: Project_A Project_B Project_C Project_D Project_E Project_F Project_G NPV= $137,083 $31,290 $6,016 $7,647 ($584) $12,521 $9,214 IRR= 31.80% 48.34% 12.03% 11.30% 9.94% 26.79% 37.87% MIRR= 18.52% 23.52% 10.62% 10.59% 9.97% 23.53% 20.76% PI= 1.69 2.25 1.040 1.038 1.00 2.25 1.92 The Weighted Average Cost of Capital is 10%. Which of the following 10 statements are true (there are several, select all that are correct). Consider each statement on its own separate from the others listed:
Question 14 options:
| If all projects are independent, under the IRR rule projects A, B, C, D, F and G should be taken | |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the NPV rule projects A, D, and F should be undertaken |
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| If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken |
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| If all projects are independent, under the NPV rule, all projects should be taken |
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| If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects B, C, and G should be undertaken |
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| If all projects are mutually exclusive, under the NPV rule only project A should be taken |
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| If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects A, D, and F should be undertaken |
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| If all projects are independent, under the MIRR rule projects A, B, C, D, F and G should be taken |
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| If all projects are mutually exclusive, under the IRR rule only project B should be taken |
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