Project ATime 0- 10,000Time 15,000Time 2Time 34,0003,000Project B- 10,0004,0003,00010,000If WiseGuy Inc. is choosing one of the above mutually exclusive projects (Project A or Project B), given a discount rate of 8%, which should the company choose?OA. Project AOB. Project BOC. Neither project-both have negative NPV.OD. Both projects-both have positive NPV.

Step 1: Step 2: Step 3: Step 4:

Answered: Project A Time 0 - 10,000 Time 1 5,000…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section: Chapter Questions

Problem 23SP: Start with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site....

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The following information on two mutually exclusive projects is given below:n Project A Project B0 -3,000 -5,0001 1,350 1,3502 1,800 1,8003 1,500 5,406IRR 25% 25%Which of the following statements is correct?(a) Since the two projects have the same rate of return, they are indifferent.(b) Project A would be a better choice, as the required investment is smaller withthe same rate of return.(c) Project B would be a better choice as long as the investor’s MARR is lessthan 25%.(d) Project B is a better choice regardless of the investor’s MARR
Given the following two mutually exclusive projects, always choose Project A (the project with a higher IRR). Project NPV IRR A $100 10.5% B $150 9.5% Group of answer choices True False
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PRINTED NAME _____________________________________________ Project X Project Y PB (payback) DPB (Discounted Payback) NPV $ PI IRR% MIRR% EAA (NUS) $ CROSSOVER RATE % NPV $ (using crossover rate) If the projects are INDEPENDENT, which would you choose? WHY? _____________________________________________________________ If the projects are MUTUALLY EXCLUSIVE, which would you choose? WHY? _____________________________________________________________ When you would be INDIFFERENT between the projects? WHY? _____________________________________________________________ SIGNATURE _____________________________________________________
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