Question: John has to choose between Project A and Project B, which are mutually exclusive. Project A has an initial cost of $30,000 and an internal

John has to choose between Project A and Project B, which are mutually exclusive. Project A has an initial cost of $30,000 and an internal rate of return of 16 percent. Project B has an initial cost of $49,000 and an internal rate of return of 12 percent. Explain why the selection of the project with the higher internal rate of return could be a faulty decision.

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