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1. Mutually Exclusive Projects Suppose you are the CEO of an automobile manufacturer that is considering investing in one of two production lines: Line A

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1. Mutually Exclusive Projects Suppose you are the CEO of an automobile manufacturer that is considering investing in one of two production lines: Line A and Line B. Installing Line A would cost $300,000 today. Once installed, Line A would build cars that run on hydrogen fuels, bringing a benefit of $90,000 per year from year 1 to year 5 . In contrast, installing Line B would cost $50,000 today. Line B would make gasoline cars, and it would bring a benefit of $20,000 per year from year 1 to year 5 . (a) Find the NPV of each project, when the appropriate discount rate is 10%. (b) Based on the NPV found in (a), which project(s) should you take if you have no constraints? (c) Now suppose that your company has limited land to use, so you may install only one of the two lines. Considering the constraint, which project should you take

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