You are faced with two mutually exclusive projects.

Year Project A Project B

$0$ $$-1000$ $$-1000$

$1$ $$300$ $$600$

$2$ $$400$ $$400$

$3$ $$800$ $$400$

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If the required rate of return is $15\mathrm{.}47\%,$ the NPV of Project A equals that of Project B$.$ You would be indifferent between the two projects.

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If the required rate of return is greater than $15\mathrm{.}47\%,$ which NPV would be higher?

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