Project X has an internal rate of return (IRR) of 14%. Project Y has an IRR of 17%. Both projects have simple cash flows (all positive after the initial one). Which of the following statements is most likely correct If the required rate of return is:（）
A. 14%, the net present value (NPV) of Project Y will exceed the NPV of project X.
B. less than 17%, Project Y will always have a shorter payback than Project X.
C. greater than 17%, Project Y will always have a shorter payback than Project X.
参考答案：A
解析：
Apart from the first alternative, the remaining statements are not necessarily true. We know that the NPV of Project X=0 at a 14% discount rate and that the NPV of Project Y is ＞ 0. First, there is no well-defined relationship between the required rate of return and ordinary payback. Second, while the last statement could be true, we cant say this for sure because we don’t know what the crossover rate between the two projects is based on the information given. If Project Y is absolutely smaller, its NPV may be small compared to that of Project X.