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?

Question 12 options:

	choose A
	choose B
	choose neither A nor B
	we cannot make the decision based on the information given