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28 Sep 2019
What types of projects require the least detailed and the most detailed analysis in the
capital budgeting process?
(10-4) When two mutually exclusive projects are being compared, explain why the short-term
project might be ranked higher under the NPV criterion if the cost of capital is high
whereas the long-term project might be deemed better if the cost of capital is low. Would
changes in the cost of capital ever cause a change in the IRR ranking of two such projects?
Why or why not?
What types of projects require the least detailed and the most detailed analysis in the
capital budgeting process?
(10-4) When two mutually exclusive projects are being compared, explain why the short-term
project might be ranked higher under the NPV criterion if the cost of capital is high
whereas the long-term project might be deemed better if the cost of capital is low. Would
changes in the cost of capital ever cause a change in the IRR ranking of two such projects?
Why or why not?
Elin HesselLv2
29 Sep 2019
