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Which option is the financial manager likely to choose

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Reference no: EM132803334

Question - Suppose you are a financial manager and you have the following information on two projects:

 

Project Alpha

Project Beta

NPV

$34,670

$1,500

IRR (required rate of return is 10%)

12.4%

10.6%

Payback Period

6 years

2 years

Required -

1. If the projects are mutually exclusive, is there a clear best option to which project should be undertaken? Why or why not?

2. Which option is the financial manager likely to choose? Why?

3. Under what circumstances would the other project be undertaken?

Reference no: EM132803334

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