Consider two projects, X and Y. Project X's IRR is 19% and Project Y's IRR...
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Consider two projects, X and Y. Project X's IRR is 19% and Project Y's IRR is 17%. The projects have the same risk and the same lives, and each has constant cash flows during each year of their lives. If the cost of capital is 10%, Project Y has a higher NPV than X. Given this information, which of the following statements is CORRECT?
a. The crossover rate must be greater than 10%.
b. Project X is larger in the sense that it has the higher initial cost.
c. If the cost of capital is 18%, Project Y will have the higher NPV.
d. If the cost of capital is 8%, Project X will have the higher NPV.
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