The IRR of normal Project X is greater than the IRR of normal Project Y, and both IRRS are greater than zero. Also, the NPV of X is greater than the NPV of Y at the cost of capital. If the two projects are mutually exclusive, Project X should definitely be selected, and the investment made, provided we have confidence in the data. Put another way, it is impossible to draw NPV profiles that would suggest not accepting Project X. Group of answer choices True False

Using NPV, a project is rejected if it is a. equal to zero. b. negative. c. positive. d. equal to the required rate of return. e. greater than the cost of capital.

Using IRR, a project is rejected if the IRR a. is equal to the required rate of return. b. is less than the required rate of return. c. is greater than the cost of capital. d. is greater than the required rate of return. e. produces an NPV equal to zero.

Which of the following statements is CORRECT?   a.  An NPV profile graph shows how a project's payback varies as the cost of capital changes.   b.  The NPV profile graph for a normal project will generally have a positive (upward) slope as the life of the project increases.   c.  An NPV profile graph is designed to give decision makers an idea about how a project's risk varies with its life.   d.  An NPV profile graph is designed to give decision makers an idea about how a project's contribution to the firm's value varies with the cost of capital.   e.  We cannot draw a project's NPV profile unless we know the appropriate WACC for use in evaluating the project's NPV. Provide explanation for the choice