Question
Your company is considering two mutually exclusive projects, A and B, whose costs and cash flows are shown below. The projects are equally risky, and
Your company is considering two mutually exclusive projects, A and B, whose costs and cash flows are shown below. The projects are equally risky, and their cost of capital is 11%. Choose the correct recommendation.
Year 0 1 2 3 4
Cash Flow A -3,100 960 1,080 1,200 1,440
Cash Flow B -2,500 800 900 1,000 1,200
a) Since the NPV and the IRR of project A are both higher than the NPV and the IRR of project B, project A is recommended.
b) The two projects have about the same NPV, but since the IRR of project B is materially higher than the IRR of project A, project B is recommended.
c) The two projects have about the same NPV, but since the IRR of project A is materially higher than the IRR of project B, project A is recommended.
d) Since the NPV and the IRR of project B are both higher than the NPV and the IRR of project A, project B is recommended.
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The Emerald Handbook On Cryptoassets Investment Opportunities And Challenges
Authors: H. Kent Baker, Hugo Benedetti, Ehsan Nikbakht, Sean Stein Smith
1st Edition
1804553212, 978-1804553213
