Question: A. 1) We face two projects. One is to be financed with equity only. Its IRR is 12% and the cost of equity is 14%.

A. 1) We face two projects. One is to be financed with equity only. Its IRR is 12% and the cost of equity is 14%. The other project will be financed only with debt whose after tax cost is 6.5%. The IRR is 8% of the second project The COC is 10%. Which project should we choose and why

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