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If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why?

If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why?

Essentials Of Investments
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
Problem 1PS
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c)  If both the projects have recorded a positive NPV value and the projects are mutually exclusive, which projects would you recommend for FB Company to undertake? Why? 

FB Company is considering investing in two construction projects, and he developed the following estimates of the cash flows. His required return is 10% and views these projects as equally risky. |Project 1 cash flows -$550,000 $150,000 $200,000 $150,000 $150,000 $100,000 Project 2 cash flows -$700,000 $200,000 $150,000 $250,000 $150,000 $150,000 Year 1 5
Transcribed Image Text:FB Company is considering investing in two construction projects, and he developed the following estimates of the cash flows. His required return is 10% and views these projects as equally risky. |Project 1 cash flows -$550,000 $150,000 $200,000 $150,000 $150,000 $100,000 Project 2 cash flows -$700,000 $200,000 $150,000 $250,000 $150,000 $150,000 Year 1 5
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