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Which of the following statements is true

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Question - Two mutually exclusive projects, A and B, have NPV of $2.5m and $2.9m respectively. However, Project A's IRR is greater than Project B's IRR. The cross-over rate for the projects' NPV profiles is 12%. Which of the following statements is true?

1) The projects' cost of capital is greater than 12%

2) The projects' cost of capital is less than 12%

3) The projects' cost of capital is equal to 12%

4) Insufficient Information

Reference no: EM132643592

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