Question: You are considering two mutually exclusive projects with the following cash flows. Will your choice between the two projects differ if the discount rate for


You are considering two mutually exclusive projects with the following cash flows. Will your choice between the two projects differ if the discount rate for both projects is 8% rather than 11%? If so, what would you do in each case? Year Project A -$240,000 0 Project B -$198,000 $110,800 $ 82,500 $ 45,000 $325,000 Yes; Select A at 8% and select neither at 11%. O no; Regardless of the discount rate, project B always has the higher NPV. Yes; Select A at 8% and B at 11%. No; Regardless of the discount rate, project A always has the higher NPV. Yes; Select B at 8% and A at 11%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
