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CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4
CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$400 $75 $75 Project 2 -$400 $250 $250 Which project would you recommend? $75 $75 $170 $75 $170 $75 Select the correct answer. Oa. Neither Project 1 nor 2, since each project's NPV 0. Oc. Project 2, since the NPV2 > NPV1. Od. Project 1, since the NPV1 > NPV2. Oe. Both Projects 1 and 2, since both projects have NPV's > 0
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