Subtract the cash flows of opportunity

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Reference no: EM131321329

1. Consider two mutually exclusive projects A & B. If you subtract the cash flows of opportunity B from the cash flows of opportunity A, then you should:

A) take opportunity A if the regular IRR exceeds the cost of capital.

B) take opportunity A if the incremental IRR exceeds the cost of capital.

C) take opportunity B if the regular IRR exceeds the cost of capital.

D) take opportunity B if the incremental IRR exceeds the cost of capital.

2. An NPV graph

A) shows the payback period - the point at which NPV is positive.

B) shows the internal rate of return - the point at which NPV is zero.

C) shows the NPV over a range of discount rates.

D) B and C are correct.

Reference no: EM131321329

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