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All projects (A to G) are 7-year projects

Business Oct 13, 2020

All projects (A to G) are 7-year projects. NPV = Net present value.

IRR = internal rate of return. MIRR = modified internal rate of return. PI = profitability index.
  Project A  Project B  Project C  Project D  Project E  Project F  Project G NPV=$4,711($711)($657)$334$9,842$7,360($3,224)IRR=44.51%5.47%8.06%12.98%22.56%17.19%5.47%MIRR=25.23%7.50%8.97%11.57%16.26%13.70%7.50%PI=2.1780.8220.9451.0281.3941.2940.871
The discounting rate (r) is 10%.


Which of the following 10 statements are true (there are several, select all that are correct). Consider each statement on its own separate from the others listed:


Question 1 options:


If all projects are mutually exclusive, under the IRR rule only project E should be taken


If only projects B and C are mutually exclusive, under the NPV rule only projects A, D, E, and F should be taken


If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the MIRR rule all projects should be undertaken 


If all projects are mutually exclusive, under the NPV rule projects A, D, E and F should be taken


If projects A & D are mutually exclusive, projects B and C are also mutually exclusive and projects E and F are also mutually exclusive (all others are independent), under the IRR rule projects A, D, E, and E should be undertaken


If all projects are independent, under the MIRR rule, projects B, C and G should be rejected


If all projects are independent, under the NPV rule, projects A, D, E, and F should be taken


If all projects are mutually exclusive, under the NPV rule only project E should be taken


If all projects are independent, under the PI rule, projects A, D, E, and F should be taken


If all projects are independent, under the IRR rule, projects B, C and G should be rejected

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