solution

Explain Project A and Project B are mutually exclusive and have the following expected cash flows: A B t=0 t=1 t=2 -$120,000 $30,000 $20,000 $40,000 $70,000 -$150,000 $40,000 $20,000 $50,000 $85.000 t=3 t=4 Which of the following statement is correct?

a. Always select Project A because the IRR of Project A is higher than the IRR for Project B

b. Cannot tell from the provided information

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c. Always select Project B because the IRR of Project B is higher than the IRR for Project A

d Select Project B, if Cost of Capital for the firm undergoing the project is 5%

e. Select Project A, if Cost of Capital for the firm undergoing the project is 5%
 
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