Question: EMERGENCY !!!! Assume that a company faces two mutually exclusive project options to invest. Initial costs and the cash flows along with the IRRs of
EMERGENCY !!!!
Assume that a company faces two mutually exclusive project options to invest. Initial costs and the cash flows along with the IRRs of each investment are given below for each option. Given that interet is 5%, find A and B. Which project you select?
| Year | Project A($) | Project B ($) |
| 0 | -18000 | -23000 |
| 1 | 8412 | 3570 |
| 2 | B | 3*B |
| 3 | 6000 | A |
| IRR | 0,07 | 0,06 |
Select one:
a. A=4300, B=6000, Select Project 1
b. A=26000, B=4000, Select Project 2
c. A=10000, B=10000, Select Project 1
d. A=8000, B=9000, Select Project 1
e. A=11600, B=2000, Select Project 2
f. A=22000, B=8000, Select Project 2
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