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a company would like to invest in one of two mutually exclusive projects a or b . the projects have negative cash flow at time

a company would like to invest in one of two mutually exclusive projects a or b

.

the projects have negative cash flow at time

0

and positive cash flows later on

.

the projects irrs are

15 %

for project a and

20 % .

an investor who requires a

0 %

rate of return will be indifferent regarding the choice of project

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