Question $2$

$7$ pts

Bear lnc$.$ is evaluating two matually exclusive propects. Project A$\text{'}$s cashfows behave in a simalar marner to that of a growing ordinary anmuity with a negative growth rate. Tropact Wiscis flows behave in a sumular manner to that of a growing ordmary anauiy with a positive grometh rate. Both profects have positive cashflows followings the initial sehup costs, but Profect A$\text{'}$s insitial cashAlows are larger than Propect B$\text{'}$s$.$ Both projects have the same lifespan and same initial costs. Whath of the following are trae?

Profoct A$\text{'}$s NTV mill ahways be greater than Propect B$\text{'}$s becanse most cashflows are realined at the leginning of the peofect's lifespan.

ii$.$ Projear B$\text{'}$s NPV will be greater than Project A$\text{'}$s when the applicable discount rate is less than the crossover rate.

tIt. Mrofoct A$\text{'}$s NTV witt be greaser then Propect B$\text{'}$s when the applable discoumt rate is greater than the crossover rate.

iv$.$ Project B$\text{'}$s NPV will always be greater than Project A$\text{'}$s because cashboes received in later periods will grow to be sulficiently great enough to efleet the thintrg of Troport $A^{\text{'}}$ i cat thons alier discoounting

None of the anowers provided are correct

$4$

II and iv

IT andiir

iv