Projects A and B are mutually exclusive. If project A, the larger project,has an approximate ERR of 20 percent and project B has an approximateERR of 13 percent, which project is better if MARR=10 percent?O AThe incremental ERR method is required to determine the better project.Neither A nor B is valid.B*For our purposes, a project is valid if its internal rate of return (IRR) isless than MARR.equal to or larger than MARR.less than 0 percent.larger than MARR.

The economic rate of return (ERR) is a rate of return being used in capital budgeting to monitor and…

Projects A and B are mutually exclusive. If project A, the larger project, has an approximate ERR of 20 percent and project B has an approximate ERR of 13 percent, which project is better if MARR=10 percent? The incremental ERR method is required to determine the better project. Neither A nor B is valid. OB For our purposes, a project is valid if its internal rate of return (IRR) is * less than MARR. equal to or larger than MARR. less than 0 percent. larger than MARR.

Projects A and B are mutually exclusive. If project A, the larger project, has an approximate ERR of 20 percent and project B has an approximate ERR of 13 percent, which project is better if MARR=10 percent? The incremental ERR method is required to determine the better project. Neither A nor B is valid. OB For our purposes, a project is valid if its internal rate of return (IRR) is * less than MARR. equal to or larger than MARR. less than 0 percent. larger than MARR.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

When two mutually exclusive projects are being compared, explain why the short-term project might be ranged higher under the NVP criterion if the cost of the capital is high, whereas the long-term project might be deemed better if the cost of capital is low. Would changes in the cost of capital ever cause a change in the IRR ranking of two such projects? Why or why not?
The internal rate of return (IRR) is the: Multiple Choice discount rate that results in a zero net present value for the project. discount rate that causes a project's aftertax income to equal zero.
Basic NPV methods tell us that the value of a project today is NPV0. Time value of money issues also lead us to believe that if we choose not to do the project that it will be worth NPV1 one period from now, such that NPV0 > NPV1. Why then do we see some firms choosing to defer taking on a project. Be complete and thorough in your answer.
Subject :- Accounting
In calculating the Net Present Value, the project would be acceptable if the outcome was: Group of answer choices Positive Positive or Zero Zero Negative
You are considering the following two mutually exclusive projects. The crossover rate between these two projects is ___ percent and Project ___ should be accepted if the required return is greater than the crossover rate. Year Project A Project B 0 −$ 31,000 −$ 31,000 1 12,000 20,140 2 12,000 10,000 3 20,000 12,160
NPV & IRR Refer to the scenario above. The project(s) you select may vary depending on the WACC and whether the projects are independent or mutually exclusive. Which statement is INCORRECT? If the projects are independent and the WACC is 11.0%, both projects A and B are acceptable. If the projects are independent, Project A would be acceptable if the WACC is 17%, but Project B would not. If a project's NPV is negative, the project cannot be accepted. If the projects are mutually exclusive and the WACC is 11.0%, only project B is acceptable. If the projects are mutually exclusive and the WACC is 6.0%, only project B is acceptable.
If the required rate of return of a project is 17% and the IRR rate is calculated as 15%. Identify from the following the correct decision statement. a. Yes, we can Accept the project b. None of the options c. Yes, we can accept the project if required rate change to 14% d. No, we need to reject the project
A project is economically feasible if: O a Its future worth is less than zero O b. Its annual worth is greater than 0 O .ts internal rate of return is equal to its external rate of return O d. Its external rate of return is less than the minimum attractive rate of return O e. Its external rate of return is greater than 0
2) The expected return of Project Y is at least equal to the expected return of Project X, and the variance of Y is less than that of X. What would you do? A) Prefer Project Y B) Accept both projects C) Prefer Project X D) Reject both projects.
Which project below would you consider acceptable? One whose IRR is greater than the MARR One whose MARR is greater than the IRR O One whose RIC is less than the MARR One whose MARR is greater than the MIRR
The table below shows internal rate of return for three investment projects A, B and C and there differences. By capital investment, A B> A O b. A>C> B O c. C>A> B O d. B>A> c O e. A>B> C

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