Please answer both for full points. 1. You are comparing two mutually exclusive
ID: 2706984 • Letter: P
Question
Please answer both for full points.
1. You are comparing two mutually exclusive projects. The crossover point is 12.3 percent. You have determined that you should accept project A if the required return is 13.1 percent. This implies you should:
a. always accept project A.
b. be indifferent to the projects at any discount rate above 13.1 percent
c. always accept project A if the required return exceeds the crossover rate.
d. accept project B only when the required return is equal to the crossover rate
2. The expected rate of return on a stock portfolio is a weighted average where the weights are based on the:
a. market price per share of each stock
b. market value of the investment in each stock
c. original amount invested in each stock.
d. cost per share of each stock held
Explanation / Answer
c. always accept project A if the required return exceeds the crossover rate.
b. market value of the investment in each stock