You are considering two mutually exclusive projects with the following cash flows. If the discount rate is 7.5%, you prefer Project A and if the discount rate is 12%, you prefer Project B.
a. A;A
b. A;B
c. B;A
d. B;B
e. B;A or B as you are indifferent.
You are considering two mutually exclusive projects with the following cash flows. If the discount rate is 7.5%, you prefer Project A and if the discount rate is 12%, you prefer Project B.
Your Project A Project B
0 -$320,000 -$358,000
1 $0 $330,500
2 $0 $79,500
3 $425,000 $0
a. A;A
b. A;B
c. B;A
d. B;B
e. B;A or B as you are indifferent.