Question: Lancaster Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A has an IRR of 11%, while
Lancaster Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A has an IRR of 11%, while Project B's IRR is 14%. When the cost of capital is 8%, the projects have the same NPV. Given this information, which of the following statements is CORRECT? a) If the cost of capital is 13%, Project A's NPV will be higher than Project B's. b) If the cost of capital is greater than 14%. Project A's IRR will exceed Project B's. c) is the cost of capital is 9%, Project A's NPV will be higher than Project B's, d) if the cost of capital in 9%, Project B's NPV will be higher than Project A's e) If the cost of capital is 6%, Project B's NPV will be higher than Project A's
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