Which of the following statements is true? O We can use NPV to evaluate two mutu
ID: 2802487 • Letter: W
Question
Which of the following statements is true? O We can use NPV to evaluate two mutually exclusive repeated projects. To make an investment decision based on IRR, we do not need to know the appropriate discount rate. O We can use profitability index to evaluate mutually exclusive project For a given project, NPV and Discounted Payback Period will reach the same decision if the targeted time is infinity When comparing two mutually exclusive projects using the IRR, we should always pick the one with a higher IRR.Explanation / Answer
Option D is true.
For a given project, NPV and discounted payback period will reach the same decision if the targeted time is infinity.
Because at infinite time the npv and disc pay back will provide the same decision.