Question: Consider the three hypothetical projects shown in Table 24.1. This time, however, suppose that the interest rate is only 2%. a. Calculate the net present

Consider the three hypothetical projects shown in Table 24.1.

This time, however, suppose that the interest rate is only 2%.

a. Calculate the net present values of the three projects. Which one is now preferred?

b. Explain why the preferred choice is different with a 2%

interest rate from with a 10% interest rate.

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