Below are the estimated cash flows for two mutually exclusive projects for a company.

25.

1. Which of the following statements are true about the projects in part 3 of the information provided at a WACC of 4%?

   	A.	The NPV indicates that Project B is better, but IRR suggests Project A is better.
   	B.	Both the NPV and the IRR indicate that Project A is better.
   	C.	The NPV indicates that Project A is better, but IRR suggests Project B is better.
   	D.	Both the NPV indicate and the IRR indicate that Project B is better.

26.

1. Which of the following statements are true about the projects in part 3 of the information provided at a WACC of 6%?

   	A.	The NPV indicates that Project B is better, but IRR suggests Project A is better.
   	B.	Both the NPV and the IRR indicate that Project A is better.
   	C.	The NPV indicates that Project A is better, but IRR suggests Project B is better.
   	D.	Both the NPV and the IRR indicate that Project B is better.

27.

1. In Part 3, the mutually exclusive projects DO NOT have a conflict between NPV and IRR if the WACC is 6%.

   True

   False

28.

1. What is the crossover rate for the mutually exclusive projects in Part 3?

   	A.	4.96%
   	B.	5.13%
   	C.	8%
   	D.	There is no one, Project A dominates

29.

1. If the WACC changes, the crossover rate will change as well.

   True

   False

Year 0 1 Cash flows in K$ Project A Project B Cash flows Cash flows $ (15,500.00) $ (15,500.00) $ 8,000.00 $ 1,500.00 $ 4,000.00 $ 2,000.00 $ 2,000.00 $ 3,000.00 $ 2,000.00 $ 4,000.00 $ 2,000.00 $ 9,000.00 2 3 4 5