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The IRR of the product introduction project is 61.01%. (Round to two decimal places.) According to the IRR method, which project should the firm choose?

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The IRR of the product introduction project is 61.01%. (Round to two decimal places.) According to the IRR method, which project should the firm choose? (Select the best answer below.) Plant expansion Product introduction c. The Pl of the plant expansion project is 1.53. (Round to two decimal places.) The Pl of the product introduction project is 1.707. (Round to two decimal places.) According to the PI method, which project should the firm choose? (Select the best answer below.) Plant expansion Product introduction d. If the firm can only afford to undertake one of these investments, which project should the firm choose? (Select the best answer below.) Product introduction Plant expansion Integrative-Conficting Rankings Tho High-Figing Growth Company (HFGC) has been expanding very raplidy in recent years, making its shareholders rich in the process. The average annual fate of tefurn on the stock in the past few years has been 22%, and HFGC managers beleve that 22% is a reasonabie figure for the fim's cost of capital. To sustain a high growth rate. HF GC's CEO argues that the company must continue to invest is projects that offer the highest rate of roturn possible. Two propects aese currently under raview. The first is an expansion of the firm's production capacity, and the second project involves introducing one of the firm's existing products into a new market. Cash flows foom. aach paciect aspeacin the following tablo. fff. a. Calculate the NPV for both projects. Rank the projects based on their NPVs. b. Calculate the IRR for both projects. Rank the projocts based on their IRRS. c. Calculate the PI for both projects. Rank the projects based on their Pis. Data table d. The firm can only aford to undertake one of these investments. What do you think the firm shoufd do? (Click on the icon here [. in order to copy the contents of the data table below into a spreadsheet.)

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