In Comparing Two Projects Using an NPV Profile, at the Point

Multiple Choice

In comparing two projects using an NPV profile, at the point where the net present value of the projects involved are equal, ______________________.

A) The IRR of each is equal to zero.
B) The IRR of each is equal to the cost of capital.
C) The discount rate that equates them is called the crossover rate.
D) The projects both have NPVs equal to zero.
E) The AAR exceeds the cost of capital.