Mutually Exclusive Projects and Cash Flows
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7. You are considering two mutually exclusive projects with the following cash flows. Will your choice between the two projects differ if the required rate of return is 8% rather than 11% ? If so, what should you do?
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The solution explains how to decide between mutually exclusive projects.
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Yes; Select A at 8% and B at 11%.
The NPV of A at 8% is higher and so select A.
At 11%, the NPV of A is negative and B is positive and so select B.
7. You are ...
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