Question: 1. Consider the three hypothetical projects shown in Table 22-1. This time, however, suppose that the interest rate is only 2%. a. Calculate the net

1. Consider the three hypothetical projects shown in Table 22-1. 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 with a 2% interest rate differs from one with a 10% interest rate.

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