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14. Britney Javelin Company is considering two investments, both of which cost $15,000. The cash flows are as follows: Year 1 23 Project A
14. Britney Javelin Company is considering two investments, both of which cost $15,000. The cash flows are as follows: Year 1 23 Project A $8,100 5,400 4,050 a. Which of the two projects should be chosen based on the payback method? Project B $6,750 4,050 10,800 b. Which of the two projects should be chosen based on the NPV method? Assume a cost of capital of 7 percent. c. Should a firm normally have more confidence in answer a or answer b?
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Financial statements
Authors: Stephen Barrad
5th Edition
978-007802531, 9780324186383, 032418638X
