Which one of the following statements is incorrect ? A.Project A has an IRR of 17% and
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Which one of the following statements isincorrect?
- A.Project A has an IRR of 17% and Project B has an IRR of 15%. Therefore, we should prefer Project A to Project B.
- B.A project has an IRR of 15%. When our WACC is 15%, the NPV of the project is zero.
- C.Based on our cost of capital (WACC) of 10%, Project A has a NPV of $+10,000 and Project B has a NPV of $-5,000. We should take Project A and reject Project B.
- D.Project A has an IRR of 14% and Project B has an IRR of 12%. Given that our cost of capital (WACC) is 10%, we should take both Project A and Project B.
- E.If you are using the Net Present Value (NPV) rule to evaluate investment projects, you will accept only projects whose NPVs are positive.
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