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What should the manager do

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Question:

A financial manager receives the analysis of 3 decision rules from two mutually exclusive high risk projects that the firm has been analyzing for months. The required return is 15%, the risk adjusted WACC is 10%, and the Payback Cutoff period is 3.5 years. Based upon the following, what should the Manager do? 

 

 Project A

Project B 

Payback

3.3 years

4.2 years 

NPV

$2,500

 $2,900 

IRR

17%

15%

Answer choices:

  • Choose project A
  • Choose both Projects 
  • Reject both Projects 
  • There is not enough information to answer this question 
  • Choose project B

Reference no: EM133056732

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