Assume you have 10 to invest in a project now, and you are considering just the two below projects. Which one would you pursue and why? Both projects have rocc = 8%. Choose one option (1, 2, 3 or 4) and one reason. Hint: when considering mutually-exclusive, equal-length projects like this, the best project is always the one with the highest NPV (except for some exceptional cases where the best project might have the shortest payback period, as described in Chapter 11b). Project Cash Flow at EOY 0 1 2 A - 10 1 11 B - 10 o 12 Because it has the lowest BCR. Because it has the highest NPV. Because it has the highest BCR. Because we need to know rrf for each project, which is not provided. 4. Neither 1. Project A. U Because it has the highest IRR. 2. Project B. Because the IRR is best. U Because the payback periods are equal. 3. Not enough information is provided to answer this question. U 0 Because both NPVs are negative. What is the IRR of this project? Round your answer to 3 decimal places and do not represent your answer as a percent. EOY 0 1 2 Cash Flow - 10 0 15 Using the IRR rule for project evaluation, should you go ahead with this project if its rocc is 10%? Answer Yes or No and provide a reason. EOY 0 1 2 Cash Flow -10 0 15 Because IRR rocc Yes