(Answered) 1 if two mutually exclusive projects were being compared

Management Studies

1. If two mutually exclusive projects were being compared, would a high cost of capital favor the longer-term or the shorter-term project? Why?

2. If the cost of capital declined, would that lead firms to invest more in longer-term projects or shorter-term projects? Would a decline (or an increase) in the WACC cause changes in the IRR ranking of mutually exclusive projects?

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Business Management, Management Studies

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