Frazier Fudge, Inc A) Project X Because NPV Is $27

question 91

Multiple Choice

Frazier Fudge, Inc. is considering 2 mutually exclusive projects with the following cash flows. Which project should be accepted? Assume a cost of capital of 10%. $\begin{array}{lll}\text { Years } & \text { Project } X & \text { Project } Y \\0 & (\$ 350) & (\$ 350) \\1 & \$ 130 & \$ 200 \\2 & \$ 150 & \$ 120 \\3 & \$ 180 & \$ 120\end{array}$

• A) Project X because NPV is $27.4
• B) Project Y because NPV is $31
• C) Project X because IRR is 13.7%
• D) Project Y because IRR is 12.2%

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