Projects C and D both have normal cash flows and are mutually exclusive. Project C has a higher NPV if the cost of capital is less than 12%, whereas Project D has a higher NPV if the cost of capital exceeds 12%. Which of the following statements is CORRECT?
A. Project D is probably larger in scale than Project C.
B. Project C probably has a faster payback.
C. Project C probably has a higher IRR.
D. The crossover rate between the two projects is below 12%.
E. Project D probably has a higher IRR.
Answer: E
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