Question 10 Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, which of the following statements is correct? Project B Project A Year 96,000 -32,000 40,000 15,000 1 40,000 2 15,000 40,000 3 15,000 4 40,000 15,000 Because of time disparity, IRR indicates that Project B is better, but NPV indicates that Project A is better. Because of size disparity, IRR indicates that Project B is better, but NPV indicates that Project A is better. Time/size disparity is not a concern in this scenario. Because of size disparity, IRR indicates that Project A is better, but NPV indicates that Project B is better Because of time disparity, IRR indicates that Project A is better, but NPV indicates that Project B is better Question 11 Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, what is the EAA for Project A? Project A Project B Year 0 -300,000 -300,000 1 150.000 70,000 150,000 70,000 2 80,000 3 120,000 80,000 4 120,000 120,000 60,000 78,468 20,179 69,055 19,086 61,292