14. All projects (A to G) are 7-year projects. NPV = Net present
value. IRR = internal rate of return. MIRR = modified internal rate
of return. PI = profitability index.
The discounting rate (r) is 10%.
Which of the following 10 statements are true (there are
several, select all that are correct). Consider each
statement on its own separate from the others listed:
Question 14 options:
If all projects are mutually exclusive, under the NPV rule
projects A, B, C, D, F and G should be taken
If projects A & B are mutually exclusive, projects C and D
are also mutually exclusive and projects F and G are also mutually
exclusive (all others are independent), under the IRR rule projects
A, D, and F should be undertaken
If all projects are mutually exclusive, under the NPV rule only
project B should be taken
If projects A & B are mutually exclusive, projects C and D
are also mutually exclusive and projects F and G are also mutually
exclusive (all others are independent), under the PI rule projects
B, C, and G should be undertaken
If all projects are independent, under the NPV rule, projects A,
B, C, D, F, and G should be taken
If projects A & B are mutually exclusive, projects C and D
are also mutually exclusive and projects F and G are also mutually
exclusive (all others are independent), under the MIRR rule
projects B, C, and F should be undertaken
If projects A & B are mutually exclusive, projects C and D
are also mutually exclusive and projects F and G are also mutually
exclusive (all others are independent), under the NPV rule projects
A, D, and F should be undertaken
If all projects are independent, under the IRR rule only
project B should be taken
If all projects are independent, under the NPV rule, all
projects should be taken
If only projects E and F are mutually exclusive, under the NPV
rule only project E should be rejected
14. All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified i
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