Question: Given the following information: Project A -1,000 Year 0 I 2 3 4 5 0 50 100 200 1,500 Project B -1,000 450 350

Given the following information: Project A -1,000 Year 0 I 2 3 4 5 0 50 100 200 1,500 Project B -1,000 450 350 300 200 100 Project C 1,000 -4,600 7,910 -6,026 1,716 (a) Suppose Project A and B are mutually inclusive. If the appropriate discount or hurdle rate is equal to 10%, which project would you choose and why? Does there exist a hurdle rate that may make you reverse your decision? If yes, what is the value of that rate? (10 marks)

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