Question
Which one of the assertions about statement 1 and statement 2 is true? Project a would cost $53000 today and have the following other expected
Which one of the assertions about statement 1 and statement 2 is true? Project a would cost $53000 today and have the following other expected cash flows: $17000 in one year, $23000 in two years, $14000 in three years, and $21000 in four years. The cost of capital for project A is 16.17 percent. The project B would cost $209000 today and have the following other expected cash flows: $98000 in one year $83000 in two years $65000 in thre years and $27000 in four years. The cost of capital for project B is 12.98. Statement 1: Project A would be accepted absed on the project's internal rate of return and the IRR rule Statement 2: Project B would be accepted based on the project's payback period and payback rule if the payback threshold is 2.47 years.
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