What are the correct answers? please show work on how to solve thanks! ...
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What are the correct answers? please show work on how to solve thanks!
Ap Saden 6. Understanding conflicts between methods Aa Aa 1f projects are mutually exclusive, only one project can be chosen, The internal rate of return (IRR) and the net present value (NPV) methods will not always choose the same project. If the crossover rate on the NPV profile is below the horizontal axis, the methods will agree Projects Y and Z are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows NPV 1 Year Project Y Project z -$1,500 -$1,500 $900 $200 Prj Y 2 $40 $600 $600 $300 400 $1,000 $200 Prect Z 200 f the weighted average cost of capital (WACC) for each prolect is 10 %, do the Nov and TRR methods agree or confict? -200 O The methods conflict Q The methods agree 24 t 2 14 e coST OF CAPITAL IPerce A key to resolying this confict is the assumed reinvetment rate The hey calolebon implicitly assumes that and the calculations intermediate cash ows are renvested at the ansumes that the rate at which cash ows can be reinvested is the As a reut when evalng mutualy exdusive pretects, the is usually the beter decsion cherion

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