You know your assistant calculate the NPV's correctly. The NPV is after allowing for the outlay. Here are data for five projects.
|
Projects
|
Outlay
|
NPV
|
@Discount Rate
|
IRR
|
|
A
|
-$3.6
|
$11.2
|
15%
|
24.2%
|
|
B
|
-$8.9
|
$13.6
|
18%
|
17.1%
|
|
C
|
-$5.0
|
$4.2
|
12%
|
26.3%
|
|
D
|
-$4.2
|
$5.6
|
20%
|
27.9%
|
|
E
|
-11.0
|
$14.7
|
16%
|
22.0%
|
Assume correct discount rate used and NPV calculated correctly.
a. Which of the above projects is perceived as having the mostrisk?
b. Explain your answer to part a (please provide detailedexplanation to help me understand)
c. If project A and B are mutually excusive, whichone should you take?