Which of the following is / are correct?
1. The IRR is the discount rate which equates the present value of
an investment's expected costs to
the present value of the expected cash inflows.
2. If the cost of capital for this investment is 9% and the expected return is 10%, the investment should be rejected because its net
present value will be negative.
a. 1 only.
b. 2 only.
c. Both 1 and 2.
d. Neither 1 nor 2.