1. NPV assumes that cash flows are reinvested at . A. IRR B. Cost of Equity C. Cost of Debt D. WACC E. None of the above
2. Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project X has a NPV of $100, while Project B’s NPV is $90. Which project we should accept based on MIRRs? A. X B. Y
3. If the projects are mutually exclusive, which project we should accept based on IRRs? Discount rate=8% Year 0 1 2 3 Project X -$1,150 $1000 $300 $400 Project Y -$1,150 $500 $300 $1000 A. X B. Y.