This is a situation where you have mutually exclusive capital budgets to choose from. You look at an NPV profile knowing that the cost of capital is smaller than the cross-over point. In this area of the graph, Group of answer choices A.You should never select any capital project when the cost of capital (WACC) is less than the cross over point. B.In this situation you should not use the IRR nor the NPV to choose between capital budgeting projects. C.if you choose based on which project has the highest IRR, you will make an incorrect decision. Instead you should choose the project with the highest NPV. D.if you choose based on which project has the highest NPV, you will make an incorrect decision. You should choose the project with the highest IRR.
This is a situation where you have mutually exclusive capital budgets to choose from. You look at an NPV profile knowing that the cost of capital is smaller than the cross-over point. In this area of the graph,
Group of answer choices
A.You should never select any capital project when the cost of capital (WACC) is less than the cross over point.
B.In this situation you should not use the
C.if you choose based on which project has the highest IRR, you will make an incorrect decision. Instead you should choose the project with the highest NPV.
D.if you choose based on which project has the highest NPV, you will make an incorrect decision. You should choose the project with the highest IRR.
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