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A firm whose cost of capital is 10% is considering two mutually exclusive projects A and B, the cash flows of which are as below: 12 Year Project A Project B 50,000 62,500 Suggest which project should be taken up using (i) net present value method and (ii) the internal rate of return method. 80,000 96,170 1

A firm whose cost of capital is 10% is considering two mutually exclusive projects A and B, the cash flows of which are as below: 12 Year Project A Project B 50,000 62,500 Suggest which project should be taken up using (i) net present value method and (ii) the internal rate of return method. 80,000 96,170 1

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 7P
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A firm whose cost of capital is 10% is considering two mutually
exclusive projects A and B, the cash flows of which are as below: 
Year
Project A
Project B
7
0
50.000
80.000
1
62,500
96.170
Suggest which project should be taken up using (i) net present

A firm whose cost of capital is 10% is considering two mutually exclusive projects A and B, the cash flows of which are as below: 12. Year Project A Project B 50,000 62,500 Suggest which project should be taken up using (i) net present value method and (ii) the internal rate of return method. 80,000 96,170 1
Transcribed Image Text:A firm whose cost of capital is 10% is considering two mutually exclusive projects A and B, the cash flows of which are as below: 12. Year Project A Project B 50,000 62,500 Suggest which project should be taken up using (i) net present value method and (ii) the internal rate of return method. 80,000 96,170 1
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