A firm has to choose between projects X and Y. Project X's internal rate of return is positive. If the cash flow of project Y is discounted at project X's internal rate of return, this firm will
A) choose project X if the net present value of project Y is positive.
B) choose project X if the net present value of project Y is negative.
C) choose project Y if the net present value of project Y is positive.
D) choose project X regardless of the net present value of project Y.
B
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If your bank faces a 20 percent required reserve ratio and receives a cash deposit of $4,000 into a checkable deposit account, the maximum total amount of money possible after the banking system makes all loans is:
a. $800. b. $3,200. c. $4,000. d. $16,000. e. $20,000.
If resource prices rise and the average total cost of producing a product increases as the firms in an industry expand output in response to an increase in demand, the long-run market supply curve for the product will
a. be perfectly elastic (a horizontal line). b. be perfectly inelastic (a vertical line). c. slope upward to the right. d. be more inelastic than the short-run supply curve for the product.
The merger of two community hospitals located in the same geographic market is called:
a. horizontal integration. b. a real shame since one of the hospitals will likely close. c. a leveraged buyout. d. vertical integration. e. a conglomerate merger.
After World War II, many currencies were:
A) losing value because of the war's devastation. B) still on the gold standard. C) suffering from high inflation. D) pegged to the U.S. dollar.