Two mutually exclusive investments cost $10,000 each and have the following cash inflows. The firm's cost of capital is 12%.
a. What is the net present value of each investment?
b. What is the internal rate of return of each investment? ost of capital is 12%.
c. Which investment(s) should the firm make? y> ost of capital is 12%.
d. Would your answers be different to c if the funds received in year 1 for investment A could be reinvested at 12%, 16%, or 20%?
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