Question

All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. PI = profitability index.

Criteria:	Project_A	Project_B	Project_C	Project_D	Project_E	Project_F	Project_G
NPV=	$137,083	$31,290	$6,016	$7,647	($584)	$12,521	$9,214
IRR=	31.80%	48.34%	12.03%	11.30%	9.94%	26.79%	37.87%
MIRR=	18.52%	23.52%	10.62%	10.59%	9.97%	23.53%	20.76%
PI=	1.69	2.25	1.040	1.038	1.00	2.25	1.92

The discounting rate (r) is 10%.

Which of the following 10 statements are false - incorrect (there are several, select all that apply). Consider each statement on its own separate from the others listed:

Question 13 options:

	If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken
	If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the NPV rule projects A, D, and F should be undertaken
	If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects B, C, and G should be undertaken
	If all projects are independent, under the NPV rule, projects A, B, C, D, F, and G should be taken
	If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the MIRR rule projects B, C, and F should be undertaken
	If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F and G should be taken
	If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects A, D, and F should be undertaken
	If all projects are mutually exclusive, under the NPV rule only project A should be taken
	If all projects are mutually exclusive, under the IRR rule only project B should be taken
	If all projects are independent, under the NPV rule, all projects should be taken

Answer 1

If only projects E and F are mutually exclusive, under the NPV rule only project A should be taken

If all projects are mutually exclusive, under the NPV rule projects A, B, C, D, F and G should be taken

If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the IRR rule projects A, D, and F should be undertaken

If all projects are independent, under the NPV rule, all projects should be taken