Question: Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an

 Douglass Interiors is considering two mutually exclusive projects and have determined

Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent. The firm's debt/equity ratio is 1, and it has a corporate tax rate of 40%. The pre-tax cost of risk- free debt is 8%. The beta of the firm is 0.8, the market risk-premium is 10%. Given this information, which one of the following statements is correct? choose A choose B choose neither A nor B we cannot make the decision based on the information given

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