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You are considering the following two mutually exclusive projects. The required rate of return is 11 percent for project A and 9.5 percent for project
You are considering the following two mutually exclusive projects. The required rate of return is 11 percent for project A and 9.5 percent for project B. Which project should you accept and why? Year Project A Project B 0 -30,000 -30,000 1 23,000 28,000 2. 24,000 26,000 3 22,000 12,500 Project A; because it has the higher required rate of return Project B; because its NPV is about $490 more than the NPV of project A Project A; because its NPV is about $819 more than the NPV of project B Project B; because it has a shorter payback period Project B; because it has the lower required rate of return
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