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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. a. 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. b. 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. c. 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. d. 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
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