When the marginal cost of capital is the same for two projects and there are no funds constraints, you will selectProject with the shorter payback periodBoth the projects if NPVs are positivePreferably project with higher IRR and higher NPVProject with the higher IRR

There are two projects: project A and project B. Each of the project has the cost of Rs 100,000 and cost of capital for each project is 12 percent. The project's expected net cash flows are as follows: Year Project A Project B 0 Rs (100,000) Rs (100,000) 1 65,000 35,000 2 30,000 30,000 3 30,000 30,000 4 10,000 10,000 a. Calculate NPV for each project. Which project or projects should be accepted if they are independent? b. Calculate IRR for each project. Which project should be accepted if they are mutually exclusive?

Which capital budgeting technique is best suited for evaluating projects of unequal duration?  A. Payback Period  B. Net Present Value (NPV)  C. Internal Rate of Return (IRR)  D. Profitability Index (PI)

An investor is considering three projects, A, B and C summarized in the table below.  Investment cost Annual operating profit Project life (years)Project A -70000 17000 5Project B -90000 15000 8Project C -60000 13000 6Suppose the investor can borrow funds at an interest rate of 6%, by using the NPV rule with a 5% discount rate, he should choose project _____. When using the IRR rule, he should ____ this project.

Capital budgeting projects that have Internal Rates of Return (IRR) which are lower than the firms cost of capital (WACC) will:Group of answer choicesNegative NPV'sHave positive NPV'sWill be accepted by the firmHave only negative cashflow

You have two mutually exclusive projects. Both projects require initial investment of $20 million. Project 1 generated $4 million per year in perpetuity.Project 2 generated $3 million at the end of the first year and its revenue will grow 3% per year thereafter.The cash flows of both projects start at the end of the first year. <a> IRR<b> NPV, assume the cost of capital is 6%