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CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS A firm with a WACC of 10% is considering the following mutually exclusive

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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 5 $55 Project 1 Project 2 -$350 -$500 $250 $55 $250 $55 $65 $240 $65 $240 $65 Which project would you recommend? Select the correct answer. a. Both Projects 1 and 2, since both projects have NPV's > 0. Ob. Project 1, since the NPV1 > NPV2. Oc. Neither Project 1 nor 2, since each project's NPV 0. e. Project 2, since the NPV2 > NPV1

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