Question
Projects A and B are mutually exclusive and have an initial cost of $82,000 each. Project A provides cash inflows of $34,000 a year for
Projects A and B are mutually exclusive and have an initial cost of $82,000 each. Project A provides cash inflows of $34,000 a year for three years while Project B produces a cash inflow of $115,000 in Year 3. Which project(s) should be accepted if the discount rate is 11.7 percent? What if the discount rate is 13.5 percent? Select one: a. Accept A at both discount rates b. Accept A at 11.7 percent and neither at 13.5 percent c. Accept B at both discount rates d. Accept both at 11.7 percent and neither at 13.5 percent e. Accept B at 11.7 percent and neither at 13.5 percent
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