Question
You are considering two independent projects that have differing requirements. Project A has a required return of 12 percent compared to Project Bs required return
You are considering two independent projects that have differing requirements. Project A has a required return of 12 percent compared to Project Bs required return of 13.5 percent. Project A costs $75,000 and has cash flows of $21,000, $49,000, and $12,000 for Years 1 to 3, respectively. Project B has an initial cost of $70,000 and cash flows of $15,000, $18,000, and $41,000 for Years 1 to 3, respectively. Given this information, you should: 1. accept both Project A and Project B. 2. accept Project A and reject Project B. 3. accept Project B and reject Project A. 4. reject both Project A and Project B. 5. accept whichever one you want but not both.
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