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The hurdle rate is equal to the discount rate in the NPV calculation,
which is 18%. Both projects pass the hurdle rate.
Q21
• Refer to Exhibit 8-3. If the two projects are
mutually exclusive, which project should the
firm choose? What is the problem that the
firm should be concerned with in making this
decision?
a. project 1; discount rate
b. project 2; discount rate
c. project 1; project scale
d. project 2; project scale
Q21
• Refer to Exhibit 8-3. If the two projects are
mutually exclusive, which project should the firm
choose? What is the problem that the firm should
be concerned with in making this decision?
a. project 1; discount rate
b. project 2; discount rate
c. project 1; project scale
d. project 2; project scale