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Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an
Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent. The firm's debt/equity ratio is 1, and it has a corporate tax rate of 40%. The pre-tax cost of risk- free debt is 8%. The beta of the firm is 0.8, the market risk-premium is 10%. Given this information, which one of the following statements is correct? choose A choose B choose neither A nor B we cannot make the decision based on the information given
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