Facing the possibility of two mutually exclusive projects

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Reference no: EM131079317

Johnson Mirrors is facing the possibility of two mutually exclusive projects. They have determined that the required rate for similar projects is 11.7 percent. Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent. Given this information, which one of the following statements is correct? Select one:

a. Project A should be accepted as its IRR is closer to the crossover point than is Project B's IRR.

b. Project B should be accepted as it has the higher IRR.

c. Both projects should be accepted as both of the project's IRRs exceed the crossover rate.

d. Neither project should be accepted since both of the project's IRRs exceed the crossover rate.

e. You cannot determine which project should be accepted given the information provided.

Reference no: EM131079317

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