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Draw a Graph That Illustrates Two Mutually Exclusive Investments, a and B

Question 407

Essay

Draw a graph that illustrates two mutually exclusive investments, A and B, with a crossover rate of
return equal to 10%, and with A having the higher NPV at a discount rate of zero percent. Explain
the graph, including under which conditions project A or project B would be chosen using NPV and
then using IRR.

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