Question
OPPfel Hospitality Consulting Inc. has two similar financial projects to offer one of its corporate clients in the hospitality industry. OPPfel wants to evaluate a
OPPfel Hospitality Consulting Inc. has two similar financial projects to offer one of its corporate clients in the hospitality industry. OPPfel wants to evaluate a set of capital budgeting projects and come up with the best decision according to the projects IRR and PI for the client. NINV and NCF data for both of the projects are shown in the data table below:
Year | Project AR | Project BF |
0 | -$100,000 | -$100,000 |
1 | $70,000 | $20,000 |
2 | $60,000 | $50,000 |
3 | $20,000 | $100,000 |
If the minimum required rate of return is 10.00% for both of the capital budgeting projects, which one of the projects provides a better investment decision that OPPfel can consult to the its client?
Group of answer choices
Projects AR and BF have the same investment return so both of them
Neither of the projects
Project AR
Project BF
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