Multiple Choice

• Both projects should be accepted because they have IRRs of 22.87% and 28.45%, which exceed the 11% requirement.

• Both projects should be accepted because they both have positive NPVs.

• Project I should be accepted because it has an NPV of $3,908.58. Project II cannot also be accepted.

• Project II should be accepted because it has an IRR of 28.45%, which is greater than Project I's IRR.

• Both projects should be accepted because their payback periods are only about 2 years.

An efficient market is defined as one where all investments in that market are ____ investments.

Multiple Choice

• Zero net present value

• Positive net present value

• Positive real rate of return

• Zero real rate of return

• Zero risk premium

The Commodore Co. is trying to decide between the following two mutually exclusive projects: Year 0 Cash Flows Project -$18,000 $8,500 $9,000 $9,5001 11 Project 11 -$18,000 $9,000 $8,400 $9,400 2 13 The only requirement the company has is that any project that is accepted must produce a minimum rate of return of 11%. What should the company do and why