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Two mutually exclusive projects

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You have to choose between two mutually exclusive projects A and B. The cash-flows and the IRRs for the two projects, as well as for the incremental project A – B, are presented in the table below:

Is the NPV-function for projects A, B and A – B upward-sloping or downward-sloping? Briefly motivate your answer.

For what range of discount rates should you choose project A and for what range of discount rates should you choose project B?

Reference no: EM131566206

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