0 1 ring the following mutually exclusive projects: 2 Project 1 -$250 $75 Project 2 -$400 $350 Which project would you recommend? 3 $75 $75 $350 $120 4 5 $165 $165 $120 $120 Select the correct answer. Oa. Neither Project 1 nor 2, since each project's NPV < 0. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Project 2, since the NPV2 > NPV1. Od. Both Projects 1 and 2, since both projects have IRR's > 0. Oe. Project 1, since the NPV₁ > NPV2.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A firm with a WACC of 10% is considering the following mutually exclusive projects:
0
1
2
Project 1
-$250 $75
Project 2
-$400
$350
Which project would you recommend?
$75
$350
3
$75
$120
4
5
$165
$165
$120 $120
Select the correct answer.
Oa. Neither Project 1 nor 2, since each project's NPV < 0.
Ob. Both Projects 1 and 2, since both projects have NPV's > 0.
Oc. Project 2, since the NPV₂ > NPV1.
Od. Both Projects 1 and 2, since both projects have IRR's > 0.
Oe. Project 1, since the NPV₁ > NPV2.
Transcribed Image Text:A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 Project 1 -$250 $75 Project 2 -$400 $350 Which project would you recommend? $75 $350 3 $75 $120 4 5 $165 $165 $120 $120 Select the correct answer. Oa. Neither Project 1 nor 2, since each project's NPV < 0. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Project 2, since the NPV₂ > NPV1. Od. Both Projects 1 and 2, since both projects have IRR's > 0. Oe. Project 1, since the NPV₁ > NPV2.
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