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1. Here's a graph showing the net present value of two projects, cleverly named Project A and Project B, graphed against the interest rate that
1. Here's a graph showing the net present value of two projects, cleverly named Project A and Project B, graphed against the interest rate that is used to calculate their net present values, which you may know as NPV. I'm going to ask you a few questions about this graph, so please pay close attention: NPV 4% 7% 10% Int. Rate NPV B | A. What are the internal rates of return (IRRs) for the two projects? B. Why is it that the NPV curve usually declines as the interest rate increases? C. Given your answer for part B, what the heck is going on with Project 1? Why is it so weird? D. Which of these projects should be done if the two projects are mutually exclusive, that is, if only one or the other can be done? E. Which of these projects should be done if the two projects are not mutually exclusive
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