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QUESTION
A firm with a WACC of 10% is considering the following mutually exclusive projects: (Attached below) Which project would you recommend?
Which project would you recommend?
Select the correct answer.
I. Project 2, since the NPV2 > NPV1.
II. Both Projects 1 and 2, since both projects have IRR's > 0.
III. Both Projects 1 and 2, since both projects have NPV's > 0.
IV. Project 1, since the NPV1 > NPV2.
V. Neither A or B, since each project's NPV < 0.
