Question: The following two mutually exclusive projects are being evaluated. The firm's required rate of return is 12%. Year Project A Cash Flow Project B Cash
The following two mutually exclusive projects are being evaluated. The firm's required rate of return is 12%. Year Project A Cash Flow Project B Cash Flow 0 -$85,000 -$136.000 1 42,500 43,350 2. 42,500 43,350 3 42,500 43,350 4 43,350 5 43,350 Which of the following statements best describes projects A and B? Both projects should be accepted because they have positive NPVs and EAAs. Project B should be accepted because it has the highest EAA. Project A should be accepted because it has the highest EAA. O Project B should be accepted because it has the highest NPV. Neither project is acceptable
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