Question: A company is considering two mutually exclusive projects A and B. NPV of project A is $10 million, NPV of project B is $5 million.

A company is considering two mutually exclusive projects A and B. NPV of project A is $10 million, NPV of project B is $5 million. IRR of project A of 20% and IRR of project B is 25%. Both projects require an initial investment of $10 million, and both projects have the same cost of capital, namely 10%. Which project(s) will you choose and why?

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