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Which Mutually Exclusive Project Would You Select,if Both Are Priced

Question 34

Multiple Choice

Which mutually exclusive project would you select,if both are priced at $1,000 and your discount rate is 15 percent; Project A with three annual cash flows of $1,000,or Project B,with three years of zero cash flow followed by three years of $1,500 annually?


A) Project A
B) Project B
C) you are indifferent since the NPVs are equal
D) Neither project should be selected

Correct Answer:

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