A company must choose between the following three mutually exclusive projects: Year O cash flow Year...

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A company must choose between the following three mutually exclusive projects: Year O cash flow Year 1 cash flow Year 2 cash flow Year 3 cash flow Year 4 cash flow Project X -$15,000 -$2,000 $4,000 $8,000 $14,000 Project Y -$15,000 $7,500 $6,000 $4,500 $3,000 Project Z -$15,000 $4,000 $6,000 $7,000 $5,000 If all three projects have an 8% cost of capital, which project should the firm chose and why? Project X because it has the highest IRR Project X because it has the highest NPV Project Y because it has the highest IRR Project Y because it has the highest NPV Project Z because it has the highest IRR Project Z because it has the highest NPV A company must choose between the following three mutually exclusive projects: Year O cash flow Year 1 cash flow Year 2 cash flow Year 3 cash flow Year 4 cash flow Project X -$15,000 -$2,000 $4,000 $8,000 $14,000 Project Y -$15,000 $7,500 $6,000 $4,500 $3,000 Project Z -$15,000 $4,000 $6,000 $7,000 $5,000 If all three projects have an 8% cost of capital, which project should the firm chose and why? Project X because it has the highest IRR Project X because it has the highest NPV Project Y because it has the highest IRR Project Y because it has the highest NPV Project Z because it has the highest IRR Project Z because it has the highest NPV

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