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2. (10 Marks) McKeen Corp. is considering investments in three different projects. Consider the following cash flows of the three independent projects. Assume the discount
2. (10 Marks) McKeen Corp. is considering investments in three different projects. Consider the following cash flows of the three independent projects. Assume the discount rate for McKeen Corp. is 10 percent. Further, the company only has $15 million to invest in new projects this year. Year 0 1 20 Cash Flow (in $ millions) A B C -4 -11 -15 12 10 10 80 200 150 e 35 55 a. Based on the profitability index decision rule, rank these investments. b. Based on the NPV, rank these investments. C. Based on your findings in (a) and (b), what would you recommend to the CEO of McKeen Corp. and why
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