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1 and resume). 1.5 points Use the following information to answer questions 1-4. A firm has identified four projects available for investment. All projects shown
1 and resume). 1.5 points Use the following information to answer questions 1-4. A firm has identified four projects available for investment. All projects shown below require an initial investment today of $14,000. The firm currently uses a common discount rate of 10% for all projects and the firm's required payback period is 2 years. The expected cash flow stream for each of the four projects is given in the following table: Year 1 Year 2 Year 3 Year 4 Year 5 Project A Project Life 2 years $1,500 B 3 years $6,000 $5,000 4 years $6,000 $7,000 $2,000 D 5 years $5,000 $3,000 $2,000 $1,000 Using the payback period criterion, which project(s) should the firm accept? 0000 Projects A and B Only Project B Projects C and D Only Project A $12,500 $7,000 $3,000 $6,000
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