Question: 14. Suppose two mutually exclusive projects ABC and XYZ one could invest in. Both projects would require an initial investment of $750,000. Project ABC has

14. Suppose two mutually exclusive projects ABC and XYZ one could invest in. Both projects would require an initial investment of $750,000. Project ABC has a one-time cash flow next year of $500,000 whereas project XYZ is characterized by a cash flow of $100,000 next year. The cash flow will then continue to grow forever at a fixed rate of 2%. The incremental IRR for this project pair comes closest to: A) 24.5% B) 25.5% C) 26.5% D) 27.5% Ans: D

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