Question: You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life

 You are considering the following two mutually exclusive projects. Both projects
will be depreciated using straight-line depreciation to a zero book value over
the life of the project Neither project has any salvage value. Project

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project Neither project has any salvage value. Project A Project B Year Cash Flow Year Cash Flow 0 - $75,0000 -$70,000 1 $19,000 1 $10,000 2 $48,000 2 $ 16,000 3 $12,000 3 $72,000 Required 10 percent 13 rate of percent return Required 2.0 years 2.0 payback years period Required 8 percent 11 accountin percent g return Based upon the internal rate of return (IRR) and the information provided in the problem, you should: O A) accept both project A and project B. B) accept project B and reject project A. C) accept project A and reject project B. D) reject both project A and project B. E) Ignore the IRR rule and use another method of analysis. Joel's Shop needs to maintain 15% of its sales in net working capital. Joel's is considering a 4-year project which will increase sales from their current level of $130,000 to $150,000 the first year and to $165,000 a year for the following three years. What amount should be included in the project analysis for net working capital in year four of the project? A) $0 B) $24,750 OC) $7,000 D) $5,250 E) -$19,500

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