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eBook A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 H + + H

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eBook A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 H + + H Project 1 -$450 $40 $40 $40 $190 $190 Project 2 -$500 $300 $300 $135 $135 $135 Which project would you recommend? Select the correct answer. Oa. Project 1, since the NPV1 > NPV2. Ob. Neither Project 1 nor 2, since each project's NPV NPV1. Od. Both Projects 1 and 2, since both projects have IRR's > 0. Oe. Both Projects 1 and 2, since both projects have NPV's > 0. 7

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