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1 . XYZ Manufacturing Company is considering expanding its operations by investing in one of two potential projects: Project A or Project B . Both

1. XYZ Manufacturing Company is considering expanding its operations by investing in one of two potential projects: Project A or Project B. Both projects require an initial investment of $3 million. The cash flows for each project are as follows:
Project A: Year 1: $500,000 Year 2: $800,000 Year 3: $1,200,000 Year 4: $1,500,000 Year 5: $1,800,000
Project B: Year 1: $400,000 Year 2: $900,000 Year 3: $1,300,000 Year 4: $1,700,000 Year 5: $2,100,000
The company's cost of capital is 12%.
1. Calculate the Net Present Value (NPV) for each project.
2. Construct the NPV profile for Projects A and B.
3. Analyze the NPV profiles to determine which project offers the highest potential value for XYZ Manufacturing Company.

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