Mccall manufacturing has a wacc of 10 the firm is, Ask an Expert

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McCall Manufacturing has a WACC of 10%. The firm is considering two normal, equally risky, mutually exclusive, but not repeatable projects. The two projects have the same investment costs, but Project A has an IRR of 15%, while Project B has an IRR of 20%. Assuming the projects' NPV profiles cross in the upper right quadrant, which of the following statements is CORRECT?

a. Since the projects are mutually exclusive, the firm should always select Project B.

b. Each project must have a negative NPV.

c. If the crossover rate is 8%, Project B will have the higher NPV.

d. Only one project has a positive NPV.

e. If the crossover rate is 8%, Project A will have the higher NPV.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91398837

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