Question: Consider the following two projects: Project Year 0 C/F Year 1 C/F Year 2 C/F Year 3 C/F Year 4 C/F Year 5 C/F Year

Consider the following two projects:

Project

Year 0

C/F

Year 1

C/F

Year 2

C/F

Year

3

C/F

Year

4

C/F

Year

5

C/F

Year

6

C/F

Year

7

C/F

Discount

rate

Alpha

-79

20

25

30

35

40

N/A

N/A

15%

Beta

-80

25

25

25

25

25

25

25

15%

Which of the following statements is correct

A)

You should invest in project Beta since NPVBeta > 0.

B)

You should invest in project Beta since IRRBeta > 0.

C)

Your should invest in project Alpha since NPVAlpha < 0.

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