A Firm Is Evaluating Two Independent Projects Utilizing the Internal

Multiple Choice

A firm is evaluating two independent projects utilizing the internal rate of return technique. ProjectX has an initial investment of $80,000 and cash inflows at the end of each of the next five years of$25,000. Project Z has an initial investment of $120,000 and cash inflows at the end of each of the next four years of $40,000. The firm should

A) accept both if their cost of capital is 15% at the maximum.
B) reject both if their cost of capital is 12% at the maximum.
C) accept only Z if their cost of capital is 15% at the maximum.
D) accept only X if their cost of capital is 15% at the maximum.