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(1) Calculation question (10 marks) The following is the net cash flows related to two projects: Net Cash Flows (In $1,000) Year 0 1 2
(1) Calculation question (10 marks) The following is the net cash flows related to two projects: Net Cash Flows (In $1,000) Year 0 1 2 3 4 5 6 | Project A -60 2020 2020 2020 Project B -72 4 5 22 20 13 13 13 (a) Which project would you accept if they are mutually exclusive, given a 10% discount rate? Why? (3 marks) (b) Which project(s) would you prefer if they are independent, given a 15% discount rate? Why? (3 marks) (c) What is the total NPV for (b)? (4 marks)
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