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5)Use the information in the table and graph to answer the question. Cash Flow Year Project 1 Project 2 0 -$22 -$48 1 $9 $20
5)Use the information in the table and graph to answer the question.
| Cash Flow | ||
| Year | Project 1 | Project 2 |
| 0 | -$22 | -$48 |
| 1 | $9 | $20 |
| 2 | $12 | $20 |
| 3 | $11 | $25 |
If the WACC for this firm is 14%, would the company do project 1?
| No because the IRR for project 2 is greater than 14%. |
| Yes because the IRR for project 1 is less than 14%. |
| No because the IRR for project 1 is less than 14%. |
| Yes because the IRR for project 1 is greater than 14%. |
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Financial Institutions Investments And Management An Introduction
Authors: Herbert B. Mayo
8th Edition
0324178174, 9780324178173
