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1 2. Suppose your fim is considering two mutually exclusive projects with the following cash flows. Assume that both projects require a rate of retum

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1 2. Suppose your fim is considering two mutually exclusive projects with the following cash flows. Assume that both projects require a rate of retum of 8 percent (WACC). The maximum allowable payback and discounted payback statistics for the projects are two and three years, respectively Time 0 2 Project A Cash Flow -20,000 10,000 30,000 1,000 Project B Cash Flow -30,000 10,000 20,000 50,000 Use the NPV, IRR, MIRR. payback, and discounted payback decision rules to evaluate the projects, which adels) should be accepted or rejected? 1 2 MIRR + + -20k lok bok MIRR = 31:17 project A a 87 17 P PAYBALE profecta -2 1001 = 1.42 years -09) (0) 9.5 3 20 (17.09) 2 1

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