Question: ABC CO. is considering two mutually exclusive projects. Their cost of capital is 15% Project a has a a NPV of $-.25 and an IRR

ABC CO. is considering two mutually exclusive projects. Their cost of capital is 15%

Project a has a a NPV of $-.25 and an IRR of 13.7%

Project B has an NPV of $-1.37 and an IRR of 12.8%

Based on concepts discussed in chapter 11 you should advise them to

Select one:

a. Choose project A. It has the higher IRR.

b. Choose project B. It has the higher NPV.

c. Reject both projects based on a negative NPV .

d. Accept both projects based on a positive IRR

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