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%

The discounting rate (r) is 10%. Which of the following 10 statements are false/incorrect (there are several, select all that apply). Consider each statement on its own separate from the others listed:

If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F and G should be taken

If all projects are mutually exclusive, under the IRR rule only project B should be taken

If all projects are independent, under the PI rule, all projects should be taken

If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken

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

If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken

If projects A, B and C are mutually exclusive, projects C and D are also mutually exclusive and (all others are independent), under the NPV rule projects A, D, and F should be undertaken

If all projects are mutually exclusive, under the NPV rule only project A should be taken

If projects A, B and C are mutually exclusive (all others are independent), under the PI rule projects B, D, F and G should be undertaken

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 MIRR rule projects B, C, and F should be undertaken

PI= 1.69 2.25 1.040 1.038 0.999 2.25 1.92

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