Assume two mutually exclusive projects A and B have the same scale and life, but...
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Accounting
Assume two mutually exclusive projects A and B have the same scale and life, but different timing of cash flows. Project A is expected to generate large cash flows earlier in the life of the project, while project B is expected to generate large cash flows towards the end of the project. What is the range of the discount rate r (to calculate NPV) that A should be accepted.
Group of answer choices
r > crossover rate of A and B, r < IRR of A
r < crossover rate of A and B, r < IRR of A
r < crossover rate of A and B, r > IRR of A
r > crossover rate of A and B, r > IRR of A
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