FNCE 20001- For two mutually exclusive projects, the net present value
Subject: Business   / Finance
Question
Which of the following statements about the net present value method of selecting projects is true?
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1) For two mutually exclusive projects, the net present value and internal rate of return methods select different projects if the required rate of return is greater than the discount rate at which the two net present value profiles intersects.
2) If a project’s cash flows are positive after discounting them by the required rate of return, then it may be accepted if there are no better alternatives.
