Question: Consider two mutually exclusive projects: End of year cash flows Year Project M Project N 0 $100,000 $100,000 1 38,000 0 2 38,000 0 3
Consider two mutually exclusive projects:
|
| End of year cash flows | |
| Year | Project M | Project N |
| 0 | $100,000 | $100,000 |
| 1 | 38,000 | 0 |
| 2 | 38,000 | 0 |
| 3 | 38,000 | 120,000 |
If the discount rate for both projects is 10 percent, the decision should be to
a. reject both projects
b. accept only Project M
c. accept only Project N
d. accept both projects
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