Question
Projects A and B are mutually exclusive. Which of the following statements is true regarding the investment decision? tools' suitability for deciding between projects Alpha?
Projects A and B are mutually exclusive. Which of the following statements is true regarding the investment decision? tools' suitability for deciding between projects Alpha? & Beta?
a.) The incremental IRR should not be used since the projects have different discount rates.
b.) The incremental IRR should not be used since the projects have different lives.
c.) The incremental IRR should not be used since the projects have different cash flow patterns.
d.) Both the NPV and incremental IRR approaches are appropriate to solve this problem.
| Project | Year 0 ? C/F | Year 1 ?C/F | Year 2 ?C/F | Year 3 ?C/F | Year 4 ?C/F | Year 5 ?C/F | Year 6 ?C/F | Year 7 ?C/F | Discount Rate |
|
| A.) ?79 | 20 | 25 | 30 | 35 | 40 | ?N/A | ?N/A | ?15% |
|
| B.) ?80 | 25 | 25 | 25 | 25 | 25 | 25 | 25 | ?16% |
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Microfinance And Sustainable Development In Africa
Authors: Yahaya Alhassan, Uzoechi Nwagbara
1st Edition
1799874990,1799875024
