1. Capital Budgeting. Which of the following situations would likely produce no solution for IRR?
The project's initial cash flow is negative and net cash flows switch signs at least once
The project's initial cash flow is positive
Projects have unequal lives
The project has a large initial cash outflow and then only one positive cash flow over its entire life
2. Capital Budgeting. Two projects, X and Y are mutually exclusive but have equal lives. The required rate of return for both projects is 15%. Both projects have a positive NPV although NPV(X) > NPV(Y), while IRR(Y) > IRR(X). The crossover rate on the projects' NPV profile must be:
greater than 10%
less than 10%
greater than 15%
less than 15%