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5.  As the director of capital budgeting for Bissett Corporation, you are evaluating two mutually exclusive projects...

5.  As the director of capital budgeting for Bissett Corporation, you are evaluating two

mutually exclusive projects (you can only choose one) with the following cash flows.  The discount rate is 15%.

Year

Project X

Project Y

0

- 100,000

- 100,000

1

50,000

10,000

2

40,000

30,000

3

10,000

40,000

4

10,000

30,000

Which project would you choose?

a.  Project X since it has higher IRR

b.  Project Y since it has higher NPV

c.  Project X since it has higher NPV

d.  Neither project

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