21. Project A and Project B are mutually exclusive projects with equal risk. Both projects have an initial cash outflow followed by a series of cash inflows. Project A requires $1million in initial outlay, and has an internal rate of return of 13%, while Project B requires $ 800,000 in initial outlay, and has an internal rate of return of 15%. The two projects have the same net present value when the cost of capital is 5%. In other words, the crossover point is 5%. Which of the following statements is correct?

1. If the cost of capital is 10%, both projects will have a positive net present value.
2. If the cost of capital is 3%, Project B has a higher net present value than Project A.
3. If the cost of capital is 10%, Project B has a higher net present value than Project A.