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Consider the following two projects with cash flows in $: Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3
Consider the following two projects with cash flows in $: Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Discount Rate A -100 40 50 60 N/A .15 B -73 30 30 30 30 .15 Assume that projects A and B are mutually exclusive. The correct investment decision and the best rationale for that decision is to:
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invest in project B since NPVB > NPVA.
invest in project A since NPVA > 0.
invest in project A since NPVB < NPVA.
invest in project B since IRRB > IRRA.
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