Question
You are considering two mutually exclusive (you can do one or the other not both) projects with the following cash flows. Using NPV and IRR,
You are considering two mutually exclusive (you can do one or the other not both) projects with the following cash flows. Using NPV and IRR, which project should you accept if the discount rate is 9 percent? What if the discount rate is 13 percent?
| Year | Project A | Project B |
| 0 | -$200,000 | -$200,000 |
| 1 | 85,000 | 0 |
| 2 | 85,000 | 0 |
| 3 | 85,000 | 275,000 |
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Economics Of Money Banking And Financial Markets
Authors: Frederic S. Mishkin
6th Edition
0321113624, 978-0321113627
