Question: 1. Consider the three alternative projects shown in Table 7-7. This time, however, suppose that the interest rate is only 2%. a. Calculate the net

1. Consider the three alternative projects shown in Table 7-7. 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 than with a 10% rate.

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