Your boss hands you the following information for a pair of mutually exclusive projects and asks for your recommendation. What should you do? Project A B Cost of Capital 13% 13% IRR 19% 24% Year 0 - $10,000 - $10,000 ... Cash Flows Year 1 $8000 $2600 Year 2 $3000 $5000 The NPV of project A is $, and the NPV of project B is $. Using the NPV rule, project (Round to two decimal places as needed.) Year 3 $2000 $9000 should be selected.

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
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11
Your boss hands you the following information for a pair of mutually exclusive projects and asks for your
recommendation. What should you do?
Project
A
B
Cost of Capital
13%
13%
IRR
19%
24%
Year 0
- $10,000
- $10,000
19001
The NPV of project A is $ and the NPV of project B is $
(Round to two decimal places as needed.)
Cash Flows
Year 1
$8000
$2600
O
Year 2
$3000
$5000
Using the NPV rule, project
Year 3
$2000
$9000
should be selected.
TR
Econ 305
12 assigntent on connect 12, 16, 12:
Next
Transcribed Image Text:Your boss hands you the following information for a pair of mutually exclusive projects and asks for your recommendation. What should you do? Project A B Cost of Capital 13% 13% IRR 19% 24% Year 0 - $10,000 - $10,000 19001 The NPV of project A is $ and the NPV of project B is $ (Round to two decimal places as needed.) Cash Flows Year 1 $8000 $2600 O Year 2 $3000 $5000 Using the NPV rule, project Year 3 $2000 $9000 should be selected. TR Econ 305 12 assigntent on connect 12, 16, 12: Next
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