Table 10.3 A Firm Is Evaluating Two Projects That Are Mutually Exclusive

Multiple Choice

Table 10.3
A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows:
-The new financial analyst does not like the payback approach (Table 10.3) and determines that the firm's required rate of return is 15 percent. Based on IRR, his recommendation would be to ________.

A) accept both the projects
B) accept Project A and reject Project B
C) reject Project A and accept Project B
D) reject both the projects