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You know your assistant calculate the NPV's correctly. The NPV is after allowing for the outlay. Here are data for five projects.

Projects	Outlay	NPV	@Discount Rate	IRR
A	-$3.6	$11.2	15%	24.2%
B	-$8.9	$13.6	18%	17.1%
C	-$5.0	$4.2	12%	26.3%
D	-$4.2	$5.6	20%	27.9%
E	-11.0	$14.7	16%	22.0%

Assume correct discount rate used and NPV calculated correctly.

a. Which of the above projects is perceived as having the mostrisk?

b. Explain your answer to part a (please provide detailedexplanation to help me understand)

c. If project A and B are mutually excusive, whichone should you take?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9796938

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