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The following several questions refer to the diagram. a) The IRR for project A is _______; The IRR for project B is _____ ____. b)

The following several questions refer to the diagram.

a) The IRR for project A is _______; The IRR for project B is _____image text in transcribed____. b) Assume that the firm can only do one of the two projects. If the RRR for the firm is 5%, which project should the firm do? c) If the firm's RRR is less than ______, the ________ rule gives the wrong ranking. d) Which project should you pick if you are uncertain of the correct RRR? e). Suppose the cash flows from Project B are suddenly found to be lower, what would the IRR of Project B have to fall to in order to guarantee that you would always choose Project A?

Project A NPV Project B discount rate (%) 0 58 10 12

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