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Consider projects A and B ( figures in Tshs million ) Project C 0 C 1 C 2 IRRA 4 0 0 , 0 0

Consider projects A and B (figures in Tshs million)Project C0 C1 C2 IRRA 400,000+241,000+293,021B 200,000+131,000+172,031(a) The opportunity cost of capital is less than 10 percent. Use the IRR rule todetermine which projects you should accept (i) if you can undertake both, and (ii)if you can undertake only one.(b) Suppose that project A has an NPV of Tshs 690 million and project B has an NPVof Tshs 657 million. What is the NPV of the Tshs 200,000 million incrementalinvestment in A?

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