A firm with a WACC of 10% is considering the following mutually exclusive projects: 1 2 3 4 5 Project 1 -$200 $80 $80 $80 $215 $215 Project 2 -$600 $200 $200 $135 $135 $135 Which project would you recommend? Select the correct answer. Oa. Project 2, since the NPV2 > NPV1. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Both Projects 1 and 2, since both projects have IRR's > 0. Od. Project 1, since the NPV1 > NPV2. Oe. Neither Project 1 nor 2, since each project's NPV < 0.

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A firm with a WACC of 10% is considering the following mutually exclusive projects:
1
2
3
4
5
Project 1
-$200
$80
$80
$80
$215
$215
Project 2
-$600
$200
$200
$135
$135
$135
Which project would you recommend?
Select the correct answer.
Oa. Project 2, since the NPV2 > NPV1.
Ob. Both Projects 1 and 2, since both projects have NPV's > 0.
Oc. Both Projects 1 and 2, since both projects have IRR's > 0.
Od. Project 1, since the NPV1 > NPV2.
Oe. Neither Project 1 nor 2, since each project's NPV < 0.
Transcribed Image Text:dOfice eBook A firm with a WACC of 10% is considering the following mutually exclusive projects: 1 2 3 4 5 Project 1 -$200 $80 $80 $80 $215 $215 Project 2 -$600 $200 $200 $135 $135 $135 Which project would you recommend? Select the correct answer. Oa. Project 2, since the NPV2 > NPV1. Ob. Both Projects 1 and 2, since both projects have NPV's > 0. Oc. Both Projects 1 and 2, since both projects have IRR's > 0. Od. Project 1, since the NPV1 > NPV2. Oe. Neither Project 1 nor 2, since each project's NPV < 0.
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