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10. Consider the following cash flows for two mutually exclusive investments: Year o Year 1 Year 2 I Year 3 -770 562 342 138 -870

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10. Consider the following cash flows for two mutually exclusive investments: Year o Year 1 Year 2 I Year 3 -770 562 342 138 -870 100 288 860 And NPV (assumel-1) and IRR for Project A 1. Find NPV (assume l = 0) and IRR for Project A. 2. Find NPV (assume l = 0) and IRR for Project B. 3. Draw the NPV profiles for project A and project B. Label the crossover point and find the value of crossover point. 4. Which statement is true? a. if the required rate of return is 15% then project B is the better of the two b. if the required rate of return is 21.6% then project B is the better of the two c. if the required rate of return is 18.3% then project B is the better of the two d. if the required rate of return is 7.7% then projects A and B create the same amount of wealth e. if the required rate of return is 7.5% then project B is the better of the two

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