Author Question: When two mutually exclusive projects are considered, the NPV calculations and the IRR calculations ... (Read 70 times)

Pea0909berry

  • Hero Member
  • *****
  • Posts: 573
When two mutually exclusive projects are considered, the NPV calculations and the IRR calculations may, under certain circumstances, give conflicting recommendations as to which project to accept.
 
  The reason for this result is that in the NPV calculation, cash inflows are assumed to be reinvested at the cost of capital, while in the IRR solution, reinvestment takes place at A) the hurdle rate.
  B) the accounting rate of return.
  C) the prime rate.
  D) the project's internal rate of return.

Question 2

The perfect substitution of two inputs implies that
 
  A) two inputs can be substituted at a ratio of 1 to 1.
  B) one input can be substituted for another up to some point.
  C) two inputs can be substituted at some constant ratio.
  D) one input can be substituted for another.



kristenb95

  • Sr. Member
  • ****
  • Posts: 318
Answer to Question 1

D

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

The first-known contraceptive was crocodile dung, used in Egypt in 2000 BC. Condoms were also reportedly used, made of animal bladders or intestines.

For a complete list of videos, visit our video library