FIN 534 RANK Imagine Your Future / FIN 534 RANK Imagine Your Future / - Page 16

flows are $30,000. At a WACC of 10%, the two projects have identical NPVs. Which project's NPV is more sensitive to changes in the WACC? • Question 17 The WACC for two mutually exclusive projects that are being considered is 12%. Project K has an IRR of 20% while Project R's IRR is 15%. The projects have the same NPV at the 12% current WACC. Interest rates are currently high. However, you believe that money costs and thus your WACC will soon decline. You also think that the projects will not be funded until the WACC has decreased, and their cash flows will not be affected by the change in economic conditions. Under these conditions, which of the following statements is CORRECT? =============================================== FIN 534 Final Exam Set 2 (4 Sets) FOR MORE CLASSES VISIT FIN 534 Final Exam Part 2 Set 1