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You are using a net present value profile to compare Project A and B, which are...

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Finance

You are using a net present value profile to compare Project Aand B, which are mutually exclusive. Which one of the followingstatements correctly applies to the crossover point between thesetwo?

A.The internal rate of return of each project is equal tozero.

B.The net present values for both projects are the same at acertain discount rate

C. The net present value of each project is equal to zero

D. The internal rate of return for Project A equals that ofProject B, but generally does not equal zero


Not sure why the Expert asked for Data, it's not a calculation, itsasking what is true of the comparison of two projects, there is nodata....

Answer & Explanation Solved by verified expert
3.9 Ratings (625 Votes)
Answer B is true BThe net present values for both projects are the same at a certain discount rate Although we are using NPV to select the project which is    See Answer
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Transcribed Image Text

You are using a net present value profile to compare Project Aand B, which are mutually exclusive. Which one of the followingstatements correctly applies to the crossover point between thesetwo?A.The internal rate of return of each project is equal tozero.B.The net present values for both projects are the same at acertain discount rateC. The net present value of each project is equal to zeroD. The internal rate of return for Project A equals that ofProject B, but generally does not equal zeroNot sure why the Expert asked for Data, it's not a calculation, itsasking what is true of the comparison of two projects, there is nodata....

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