Question: You are given the following cash flows on two mutually exclusive projects; project A and project B. If the required rate of return is 10%,
You are given the following cash flows on two mutually exclusive projects; project A and project B. If the required rate of return is 10%, which one would you choose based on the NPV rule, and which one based on the PI rule? Year Project A Project B 0 -30,000 -12,000 1 18,000 7,500 2 18,000 7,500 3 18,000 7,500 If these two projects were independent, what would your decision be?Imagine that the firm in practice problem 11 has a third project as well as the first two, project C, which has a PI equals 2.55 and NPV equals $11,348.61. The firm in this case has a limited budget of $30 million to invest. Which project (s) should be selected and why?
i found the npv and pi please just explain which ones i should choose and why
thank you
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