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Suppose you are a financial manager and you have the following information on two projects: Project Alpha Project Beta NPV $34,670 $1,500 IRR (required rate
Suppose you are a financial manager and you have the following information on two projects:
| Project Alpha | Project Beta | |
| NPV | $34,670 | $1,500 |
| IRR (required rate of return is 10%) | 12.4% | 10.6% |
| Payback Period | 6 years | 2 years |
- If the projects are mutually exclusive, is there a clear best option to which project should be undertaken? Why or why not?
- Which option is the financial manager likely to choose? Why?
- Under what circumstances would the other project be undertaken?
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Authors: Virtual Desk Tools
1st Edition
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