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5. Your company is considering expanding, and is considering two mutually exclusive projects that will each have an initial investment (cash outflow) of $20 million,

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5. Your company is considering expanding, and is considering two mutually exclusive projects that will each have an initial investment (cash outflow) of $20 million, followed by a series of positive cashflows going out for 10 years, the conclusion of the project. Project Alpha has an internal rate of return of 23.00% and an NPV of $6 million at a discount rate of 15\%. Project Gamma has an internal rate of return of 28% and an NPV of \$4 million at a discount rate of 15%. Both projects have an NPV of exactly $2,600,000 at a discount rate of 19.5%. Which project should your company pursue if your required rate of return is 24% ? (no math required. Hint: draw the graph.)

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