Consider the following two projects: Year 2 Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Year 1 Year 3 Year 4 Project Year 0 Discount Rate A - 100 40 50 60 N/A 0.18 в - 73 30 30 30 30 0.18 Assume that projects A and B are mutually exclusive. The correct investment decision and the best rationale for that decision is to O A. invest in project B, since NPV, > NPV, O B. invest in project A, since NPV > 0. OC. invest in project A, since NPV, < NPVA- O D. invest in project B, since IRR, > IRRA

Consider the following two projects: Year 2 Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Year 1 Year 3 Year 4 Project Year 0 Discount Rate A - 100 40 50 60 N/A 0.18 в - 73 30 30 30 30 0.18 Assume that projects A and B are mutually exclusive. The correct investment decision and the best rationale for that decision is to O A. invest in project B, since NPV, > NPV, O B. invest in project A, since NPV > 0. OC. invest in project A, since NPV, < NPVA- O D. invest in project B, since IRR, > IRRA

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section: Chapter Questions

Problem 23SP

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