1. Mutually exclusive investments M and N have the same NPV at a required return of 9%. The NPV of M is lower than the NPV of N at a required return of 14%, which investment has the lower IRR?
2. Finance Theory, specifically the capital asset pricing model, says the investors don't care about firm specific risk, but only systematic risk. Given this, why do so many companies invest so much money and effort into controlling risk? What are the primary types of risk that a company seeks to control and the most important tool for controling these risks?