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7. Please use the following example to illustrate that IRR have a biased choice among mutually exclusive projects. (16%) Project C G C IRR NPV

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7. Please use the following example to illustrate that IRR have a biased choice among mutually exclusive projects. (16%) Project C G C IRR NPV @ 7% Initial proposal -350 400 14.29% $23,832 Revised proposal -375 25 2 5 475 12.56% $57,942 Note: The discount rate is 11.72% when NPV-NPVR. The two projects have the same degree of risk, while the require return of those is 7%

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