Apply IRR rule for capital budgeting decision in this case

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Reference no: EM13946888

1. You have an investment project that has two IRRs: 5% and 15%. Your required rate of return is 20%. What should you do? Please Explain.

2. Your company considers several independent projects. All of them have normal cash flows. Will it be correct to apply IRR rule for capital budgeting decision in this case?

3. Stock A has standard deviation of 0.4 and stock B has standard deviation of 0.7. As a well diversified investor, should you expect higher return for stock B? Explain

Reference no: EM13946888

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