Comparing competing projects' net present value and internal rate of return ________. A. always results in the same ranking of projects B. always results in the same accept-reject decision C. may give different accept-reject decisions D. is only necessary on independent projects
Comparing competing projects' net present value and internal rate of return ________. A. always results in the same ranking of projects B. always results in the same accept-reject decision C. may give different accept-reject decisions D. is only necessary on independent projects
Related questions
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively.
| Time: | 0 | 1 | 2 | 3 |
| Project A Cash Flow | -29,000 | 19,000 | 39,000 | 10,000 |
| Project B Cash Flow | -39,000 | 19,000 | 29,000 | 59,000 |
Use the PI decision rule to evaluate these projects; which one(s) should be accepted or rejected?
accept A, reject B - A
reject A, accept B - B
accept neither A nor B - C
accept both A and B - D
