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NEW QUESTION: 1
Project A has a higher IRR than project B Both projects have normal cash flows. If the projects have the same cost of capital which is greater than the crossover rate,
A. Both projects have the same NPV.
B. Project B has a higher NPV.
C. Insufficient information.
D. Project A has a higher NPV.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
The crossover rate is the discount rate at which the graphs of NPV versus discount rate for the two projects cross. Since the projects have normal cash flows, they will have a single crossover rate. Further, the project with the higher IRR has a "flatter" NPV profile. Therefore, if the cost of capital is larger than the crossover rate, the project with the flatter profile will have a larger NPV.
NEW QUESTION: 2
HOTSPOT
Hot Area:
Answer:
Explanation:
NEW QUESTION: 3
Cloud computing relies heavily on which of the following virtualization characteristics?
(Select two.)
A. Scalable resources
B. Information sharing
C. Hardware independence
D. Simplistic setup
E. User federation
Answer: A,C
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