Question 17
If the IRR of Alternative A is 16 percent, the IRR of Alternative B is 14 percent, and the
MARR is 12 percent, which of the following statements is correct?
Group of answer choices
Alternative A is preferred over Alternative B.
Alternative B is preferred over Alternative A.
Not enough information is given to determine which alternative is preferred.
Neither Alternative A nor Alternative B is acceptable.
Question 18
You purchase a $15,000 bond with a bond rate of 6% per year payable semi-annually
for two years. You pay $13,000 for the bond. Which of the following statements is
correct?
Group of answer choices
The cash flows will be -$13,000, $450, $450, $450, $13,450, and the bond will earn
more than 12 percent.
The cash flows will be -$13,000, $450, $450, $450, $15,400, and the bond will earn
more than 12 percent.
The cash flows will be -$13,000, $360, $360, $360, $13,450, and the bond will earn
less than 12 percent.
The cash flows will be -$13,000, $450, $450, $450, $15,400, and the bond will earn
less than 12 percent.
