Consider the following information for projects A and B, which are mutually exclusive.

a. At what discount rate will the two projects have the same net present value?
b. At the discount rate of 10%, which is the betterproject?

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Year Project A Project B Note $(100,000) S (120,000) Α-Β--100,000-(-120,000)-+20.000 S 31,250 S S 31,250 S S 31,250 S S 31,250 S S 31,250 S 200,000