Homework answers / question archive / A firm with a WACC of 10% is considering the following mutually exclusive projects:   0 1 2 3 4 5                             Project 1 -$250 $50 $50 $50 $175 $175 Project 2 -$550 $350 $350 $105 $105 $105 Which project would you recommend? Select the correct answer

A firm with a WACC of 10% is considering the following mutually exclusive projects:   0 1 2 3 4 5                             Project 1 -$250 $50 $50 $50 $175 $175 Project 2 -$550 $350 $350 $105 $105 $105 Which project would you recommend? Select the correct answer

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A firm with a WACC of 10% is considering the following mutually exclusive projects:

0

1

2

3

4

5

Project 1	-$250	$50	$50	$50	$175	$175
Project 2	-$550	$350	$350	$105	$105	$105

Which project would you recommend?

Select the correct answer.

a. Project 2, since the NPV2 > NPV1.

b. Neither Project 1 nor 2, since each project's NPV < 0.

c. Both Projects 1 and 2, since both projects have IRR's > 0.

d. Project 1, since the NPV1 > NPV2.

e. Both Projects 1 and 2, since both projects have NPV's > 0.