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A company is evaluating two possible projects with the following cash flows. Suppose that the projects are contingent. Which answer describes the correct decision if
A company is evaluating two possible projects with the following cash flows. Suppose that the projects are contingent. Which answer describes the correct decision if the firm's required rate of return is 15%?
| Year | |||||
| 0 | 1 | 2 | 3 | 4 | |
| Project 1 | -$50 | $10 | $15 | $10 | $20 |
| Project 2 | -$30 | $20 | $15 | $30 | $10 |
Question 16 options:
| Accept both projects. | |
| Accept project 1 and reject project 2. | |
| Accept project 2 and reject project 1. | |
| Reject both projects. |
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