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6. Problem 11.10 (Capital Budgeting Criteria: Mutually Exclusive Projects) eBook A firm with a WACC of 10% is considering the following mutually exclusive projects: 1

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6. Problem 11.10 (Capital Budgeting Criteria: Mutually Exclusive Projects) eBook A firm with a WACC of 10% is considering the following mutually exclusive projects: 1 2 4 $145 0 3 5 + + + + H Project 1 -$250 $75 $75 $75 $220 $220 Project 2 -$500 $250 $250 $145 $145 Which project would you recommend? Select the correct answer. Oa. Project 2, since the NPV2 > NPV1. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Neither Project 1 nor 2, since each project's NPV 0. Oe. Project 1, since the NPV1 > NPV2

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