Question
You are considering the following two mutually exclusive projects. The required rate of return is 10 percent for project A and 8 percent for project
You are considering the following two mutually exclusive projects. The required rate of return is 10 percent for project A and 8 percent for project B. Based on the NPV, which project should be chosen? Why or why not?
| Year | Project A | Project B |
| 0 | -$320,000 | -$525,000 |
| 1 | $292,000 | $396,000 |
| 2 | $165,000 | $319,000 |
| 3 | $107,000 | $204,000 |
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Analysis For Financial Management
Authors: Robert Higgins, Jennifer Koski, Todd Mitton
13th Edition
1260772365, 978-1260772364
