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(3). (10 pt) Two mutually exclusive projects with the following cash flows. The company's required rate of return is 10%. (CF in $000) Year

 

(3). (10 pt) Two mutually exclusive projects with the following cash flows. The company's required rate of return is 10%. (CF in $000) Year 0 1 2 3 (10) (11) (i) (iv) Project A -200 64 40 210 Project B -200 180 55 30 Which project should be chosen accordingly to the IRR rule? (2 pt) Which project should be chosen according to the NPV rule? (2 pt) As a good finance manager, which project would you choose? Why? (2 pt) The company's current firm value is $100,000. If it decides to invest in Project A, what would happen to its firm value? (4 pt)

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