A division manager is choosing between two mutually exclusive projects. 
The company requires any project to earn at least 12%. The manager believes that cash inflows from the project can be reinvested at the rate of 12%. Which project will the manager likely choose?
Definitions:
Marginal Cost
Expenses accrued from the creation of one more product or service unit.
Average Total Cost
The total cost of production divided by the number of goods produced, indicating the cost on average of producing each unit of output.
Marginal Revenue
The plus income from the sale of one more unit of a good or service.
Competitive Market
A market structure characterized by a large number of buyers and sellers, where no single entity can dictate prices or terms, leading to an efficient allocation of resources.
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