If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV) and internal rate of return (IRR) methodsalwaysagree.Projects Y and Z are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows.YearProject Y Project Z0-$1,500-$1,5001$200$9002$400$6003$600$3004$1,000$200NPV (Dollars)800600Project Y400Project Z200-2000246810 12 14 16 18 20COST OF CAPITAL (Percent)If the weighted average cost of capital (WACC) for each project is 14%, do the NPV and IRR methods agree or conflict?O The methods agree.O The methods conflict.

YearProject YProject Z0-1500-150012009002400600360030041000200

If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV) and internal rate of return (IRR) methods always agree. Projects Y and Z are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows. Year Project Y Project Z 0 -$1,500 -$1,500 1 $200 $900 2 $400 $600 $600 $300 $1,000 $200 NPV (Dollars) 800 600 Project Y 400 00 200 -200 Project Z 0 2 4 6 8 10 12 14 16 18 20 COST OF CAPITAL (Percent) If the weighted average cost of capital (WACC) for each project is 14%, do the NPV and IRR methods agree or conflict? O The methods agree. O The methods conflict.

If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV) and internal rate of return (IRR) methods always agree. Projects Y and Z are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows. Year Project Y Project Z 0 -$1,500 -$1,500 1 $200 $900 2 $400 $600 $600 $300 $1,000 $200 NPV (Dollars) 800 600 Project Y 400 00 200 -200 Project Z 0 2 4 6 8 10 12 14 16 18 20 COST OF CAPITAL (Percent) If the weighted average cost of capital (WACC) for each project is 14%, do the NPV and IRR methods agree or conflict? O The methods agree. O The methods conflict.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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