Change in irr ranking of two projects, Operation Management

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Change in irr ranking of two projects

Assignment:

Explain why, if two mutually exclusive projects are being compared, the shortterm project might have the higher ranking under the NPV criterion if the cost of capital is high, but the long-term project might be deemed better if the cost of capital is low. Would changes in the cost of capital ever cause a change in the IRR ranking of two such projects?

Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.

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