Business, 25.11.2020 14:00 smithsa10630

A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5
Project 1 -$200 $60 $60 $60 $220 $220
Project 2 -$600 $300 $300 $100 $100 $100

Which project would you recommend?

a. Project 2, since the NPV2 > NPV1.
b. Both Projects 1 and 2, since both projects have NPV's > 0.
c. Neither A or B, since each project's NPV < 0.
d. Both Projects 1 and 2, since both projects have IRR's > 0.
e. Project 1, since the NPV1 > NPV2.

Answers: 3

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A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5

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