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Which of the following is a type of reversible connector?
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D. RJ45
Answer: B
NEW QUESTION: 2
Project A has an IRR of 10% and project B has an IRR of 12%. The crossover rate for these projects is
7.4%. You use the NPV rule for making project selections. If both the projects have a cost of capital of
6.9%, and are mutually exclusive with normal cash flows, you should:
A. insufficient information.
B. select neither A nor B.
C. select project B.
D. select project A.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
The crossover rate is the discount rate at which the graphs of NPV versus discount rate for the two projects cross. Since the projects have normal cash flows, they will have a single crossover rate. Further, the project with the higher IRR has a "flatter" NPV profile. Therefore, if the cost of capital is smaller than the crossover rate, the project with the flatter profile will have a smaller NPV. Therefore, project A has a higher NPV at the cost of capital of 6.9% and should be selected over project B.
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