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You are considering the following two mutually exclusive projects. The required rate of return is 11.25 percent for project A and 10.75 percent for project
You are considering the following two mutually exclusive projects. The required rate of return is 11.25
percent for project A and 10.75 percent for project B. Which project should you accept and why?
A. project A; because its NPV is about $335 more than the NPV of project B
B. project A; because it has the higher required rate of return
C. project B; because it has the largest total cash inflow
D. project B; because it returns all its cash flows within two years
E. project B; because it is the largest sized project
Year 0 1 2 3 Project A -$48,000 $18,400 $31,300 $11,700 Project B -$126,900 $ 69,700 $ 80,900 $ 0Step by Step Solution
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