1. Swenson's is considering two mutually exclusive projects, Projects A and B. Project A has an IRR of 15.8 percent. Project B has an IRR of 14.2 percent. The cost of capital for the projects is 11 percent. It also has determined that the crossover rate (incremental IRR) for these projects is 12.1 percent. Given this you know that:

   I. The NPV of Project A is larger than the NPV of Project B.

   II. The NPV of Project B is larger than the NPV of Project A.

   III. Project B should be chosen.

   IV. Project A should be chosen.

   V. Both projects should be rejected because the cost of capital is less than the crossover rate indicating that both have negative NPVs.

   	A.	II and IV
   	B.	I and III
   	C.	II and III
   	D.	I and IV
   	E.	V

2. The lowest Moodys bond rating category considered to be of investment grade quality is:

   .

   	A.	A
   	B.	Ba
   	C.	Baa
   	D.	B
   	E.	Caa