1. Which of the following is NOT considered a lagging economic indicator?
prime rate
change in CPI for services
industrial production
commercial and industrial loans
consumer expectations index
2. Your division is considering two projects with the following net cash flows (in millions):
0 1 2 3
Project A -$30 $10 $15 $22
Project B -$25 $15 $14 $11
If the WACC were 5% and Projects A and B were mutually exclusive, which project would you choose?
a) Project A
b) Project B
c) Neither