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You have 3 projects with the following cash flows: 1 4 2 $39 Year Project 1 Project 2 Project 3 0 -$151 -827 19 $19

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You have 3 projects with the following cash flows: 1 4 2 $39 Year Project 1 Project 2 Project 3 0 -$151 -827 19 $19 0 40 3 $60 7,000 81 0 61 $80 -6,497 -243 For which of these projects is the IRR rule reliable? Put another way, for which of these projects would you feel comfortable that the IRR decision rule would agree with the NPV decision rule? (Choose the most appropriate answer) O A. The IRR rule should agree with the NPV rule for all of the above projects. B. Project 1 & Project 3 OC. There is not enough information available to answer this question. D. Project 2 O E. Project 3 OF. Project 1 Term in years: Rate: 1 1.8% 2 3 4 5 2.25% 2.30% 2.66% 3.13% The table above shows the interest rates available from investing in risk-free U.S. Treasury securities with different investment terms. What is the present value (PV) of cash flows from an investment that yields $4,000 at the end of each year for the next four years? O A. $21,130 B. $12,074 C. $15,093 OD. $18,111

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