14.2
Consider the following two projects:
| Year 0 | Year 1 | Year 2 | Year 3 | |
| A | -40 | 20 | -10 | 40 |
| B | -100 | 60 | 0 | 70 |
The opportunity cost of capital for both projects is 10%.
2. Assume that the IRR of project A is 16.6% and the IRR of
project B is 13.9%. If the two projects were mutually exclusive,
which would the IRR rule tell us to take? EXPLAIN. (1 pt)