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Author Question: Projects A and B have identical expected lives and identical initial cash outflows (costs). However, ... (Read 30 times)

erikka246

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on: Aug 7, 2023
Projects A and B have identical expected lives and identical initial cash outflows (costs). However, most of one project’s cash flows come in the early years, while most of the other project’s cash flows occur in the later years. The two NPV profiles are given below:

​

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Which of the following statements is correct?


◦

More of Project A’s cash flows occur in the earlier years.


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More of Project B’s cash flows occur in the earlier years.


◦

We must have information on the cost of capital in order to determine which project has the larger early cash flows.


◦

The crossover rate, i.e., the rate at which Project A and B have the same NPV, is greater than Project A’s IRR, but less than Project B’s IRR.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by erikka246 on Aug 7, 2023

katrey9207

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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erikka246

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

tkempin

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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