Question
Project H requires an initial investment of $120000 and the produces annual cash flows of $20000, $40000, and $60000. Project T requires an initial investment
Project H requires an initial investment of $120000 and the produces annual cash flows of $20000, $40000, and $60000. Project T requires an initial investment of $120000 and produces annual cash flows of $60000, $40000, and $20000. If the required rate of return is greater than 0% and the projects are mutually exclusive, then:
A- H will alway be preferable to T
B- The project rankings will change with different discount rates
C-Both H and T are not acceptable
D- H and T are equally attractive
F- T will always be preferable to H
Please guide me to find the correct answer. A through explanation for each step will be highly appreciated.
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