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Zoom is considering two normal, equally risky, mutually exclusive, but not repeatable projects. Zoom's WACC is 10%. The two projects have the same investment costs,
Zoom is considering two normal, equally risky, mutually exclusive, but not repeatable projects. Zoom's WACC is 10%. The two projects have the same investment costs, but Project A has an IRR of 20%, while project B has an IRR of 15%. Assuming the projects' NPV profiles cross, which of the following statements is most accurate?
a) Since the projects are mutually exclusive, the firm should always select project B
b) if the crossover rate is 12%, project A will have a higher NPV
c) if the crossover rate is 12%, project B will have a higher NPV
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