Ranking conflict will occur between the two projects

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Reference no: EM132039844

Two mutually exclusive projects each have a cost of $50,510, and these two projects are conventional. Their NPV profiles cross at a discount rate of 14%. Which of the following statements is correct?

a. To determine if a ranking conflict will occur between the two projects, the cost of capital is needed as well as an additional piece of information.

b. The NPV and IRR methods will select the same project if the cost of capital is greater than 14%; for example, 18 percent.

c. The NPV and IRR methods will select the same project if the cost of capital is less than 14%; for example, 10%.

Reference no: EM132039844

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