Aubey IncIs Considering Two Projects That Have the Following Cash Flows:​​​

question 71

Multiple Choice

Aubey Inc.is considering two projects that have the following cash flows:​​​ $\begin{array}{lrr} & \text { Project 1 } & {\text { Project 2 }} \\ \text { Year }& \text{ Cash Flow }&\text { Cash Flow }\\\hline 0 & -\$ 2,000 & -\$ 1,900 \\1 & 500 & 1,100 \\2 & 700 & 900 \\3 & 800 & 800 \\4 & 1,000 & 600 \\5 & 1,100 & 400\end{array}$ ​At what cost of capital would the two projects have the same NPV?

• A)4.73%
• B)5.85%
• C)6.70%
• D)7.50%

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Definitions:

Private Ownership

The legal right of individuals or corporations to own property or businesses, with the autonomy to control and derive benefits from them.

Elephant Populations

The number of elephants living in a particular area, which is influenced by factors such as habitat, poaching, and conservation efforts.

Common Resources

Goods that are non-excludable and rival in consumption, such as fisheries, the atmosphere, or public parks.

Enjoyment

The state or experience of taking pleasure or satisfaction from something.