Canada Corp.’s management has determined that two mutually exclusive projects have the following NPVs:
Project A NPV $7,000
Project B NPV $8,000
Which best describes the correct managerial decision given the information above?
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Reject both projects since both projects must have an NPV greater than $15,000.
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Accept both projects since the NPV of A and B can maximize the firm’s value.
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Accept B and reject A since B has a higher NPV than A.
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Accept A and decline B since A has greater growth potential.