F3 9. If the projects (1 & 2) are independent, the company would mostly advise: *A) Choose Project "1" since it has higher NPV than Project "2".B) Choose Project "2" since it has higher MIRR than Project "1".C) Accept both projects, since both are profitable projects.O D) None of the above. MFI Inc. is a consultancy company that is located in Lebanon. One investor has consulted MFI and askedfor an evaluation of two new proposed projects in Lebanon. The first project is repair & maintenancecenter (Project 1). This project will cost $120,000 and will generate $33,000 cash flow per year for the nextsix years.The other project (Project 2) is a beauty center. The initial costs of this project is estimated to be $75,000and it may generate $22,000 for the next six years. The company estimates that the WACC is 10%.

WACC = 10% Project 1 Time Period (N) = 6 years Initial Cost = 120,000 Annual Cash Flow = 33,000…

9. If the projects (1 & 2) are independent, the company would mostly advise: * A) Choose Project "1" since it has higher NPV than Project "2". B) Choose Project "2" since it has higher MIRR than Project "1". C) Accept both projects, since both are profitable projects. O D) None of the above.

9. If the projects (1 & 2) are independent, the company would mostly advise: * A) Choose Project "1" since it has higher NPV than Project "2". B) Choose Project "2" since it has higher MIRR than Project "1". C) Accept both projects, since both are profitable projects. O D) None of the above.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 8P

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