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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 -$450 $60 $60 Project 2 -$400 $350 $350 Which project would you recommend? $60 $50 $165 $50 $165 $50 Select the correct answer. Oa. Both Projects 1 and 2, since both projects have IRR's > 0. Ob. Project 1, since the NPV1 > NPV2. Oc. Project 2, since the NPV2 > NPV1. Od. Neither Project 1 nor 2, since each project's NPV 0

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