Which of the following projects would you feel safest in accepting? Assume the opportunity cost of capital is 12% for each project. ☐(a) “Project A” that has a small, but negative, NPV. ☐(b) “Project B” that has a positive NPV when discounted at 10%. ☐(c) “Project C” that has a cost of capital that exceeds its internal rate of return. ☐(d) “Project D” that has a zero NPV when discounted at 14%.
Which of the following projects would you feel safest in accepting? Assume the opportunity cost of capital is 12% for each project. ☐(a) “Project A” that has a small, but negative, NPV. ☐(b) “Project B” that has a positive NPV when discounted at 10%. ☐(c) “Project C” that has a cost of capital that exceeds its internal rate of return. ☐(d) “Project D” that has a zero NPV when discounted at 14%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Which of the following projects would you feel safest in accepting? Assume the opportunity cost of capital is 12% for each project.
☐(a) “Project A” that has a small, but negative, NPV.
☐(b) “Project B” that has a positive NPV when discounted at 10%.
☐(c) “Project C” that has a cost of capital that exceeds its
☐(d) “Project D” that has a zero NPV when discounted at 14%.
d
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