You are considering the following two mutually exclusive projects that will not be repeated. The required rate of return is $11.25 \%$ for project $A$ and $10.75 \%$ for project $B$. Which project should you accept and why?

A)project A; because its NPV is about £335 more than the NPV of project B.
B)project A; because it has the higher required rate of return.
C)project B; because it has the largest total cash inﬂow.
D)project B; because it returns all its cash ﬂows within two years.
E)project B; because it is the largest sized project.

Question

You are considering the following two mutually exclusive projects that will not be repeated. The required rate of return is $11.25 \%$ for project $A$ and $10.75 \%$ for project $B$. Which project should you accept and why?

A)project A; because its NPV is about £335 more than the NPV of project B. 
B)project A; because it has the higher required rate of return. 
C)project B; because it has the largest total cash inﬂow. 
D)project B; because it returns all its cash ﬂows within two years. 
E)project B; because it is the largest sized project.

Quizplus · Accepted Answer

The Answer of You are considering the following two mutually exclusive projects that will not be repeated. The required rate of return is $11.25 \%$ for project $A$ and $10.75 \%$ for project $B$. Which project should you accept and why?

A)project A; because its NPV is about £335 more than the NPV of project B. 
B)project A; because it has the higher required rate of return. 
C)project B; because it has the largest total cash inﬂow. 
D)project B; because it returns all its cash ﬂows within two years. 
E)project B; because it is the largest sized project.

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You Are Considering the Following Two Mutually Exclusive Projects That $11.25 \%$