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Consider the following proects, X and Y, where the firm can only choose one. Project X costs 600 and has cash flows of 400 in
Consider the following proects, X and Y, where the firm can only choose one. Project X costs 600 and has cash flows of 400 in each of the next 2 years. Project Y also costs 600 and generates cash flows of 500 and 300 for the next 2 years, respectively. Using IRR, which investment should the firm choose if the cost of capital is 10%?
Project X
Project Y
Neither
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