Question: For two mutually projects, we assume their NPV profiles cross and the crossover rate is 9.3%. We assume the require rate of return is r.
For two mutually projects, we assume their NPV profiles cross and the crossover rate is 9.3%. We assume the require rate of return is r. We use both NPV and IRR methods to analyze the two projects. Which of the following statements is most correct?
a) If r > 8.3%, NPV and IRR methods always obtain similar decisions.
b) If r > 9.3%, NPV and IRR methods obtain conflicting decisions.
c) If r < 8.3%, NPV and IRR methods might obtain conflicting decisions.
d) None of the above statement is correct.
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