McCall Manufacturing has a WACC of 10%. The firm is

Last updated: 7/14/2022

McCall Manufacturing has a WACC of 10%. The firm is considering two normal, equally risky, mutually exclusive, but not repeatable projects. The two projects have the same investment costs, but Project A has an IRR of 15%, while Project B has an IRR of 20%. Assuming the projects' NPV profiles cross in the upper right quadrant, which of the following statements is CORRECT? a. Each project must have a negative NPV. b. If the crossover rate is 8%, Project B will have the higher NPV. c. Only one project has a positive NPV. d. Since the projects are mutually exclusive, the firm should always select Project B. e. If the crossover rate is 8%, Project A will have the higher NPV.