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2. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the required rate of return on these projects is

2. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the
required rate of return on these projects is 11 percent, which would be chosen and why?
Project A Project B
Year Cash Flow Cash Flow
0 -40,000 -40,000
1 15,625 0
2 15,625 0
3 15,625 0
4 15,625 0
5 15,625 99,500
3. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the
required rate of return on these projects is 6 percent, what is each projects NPV?
Project A Project B
Year Cash Flow Cash Flow
0 -80,000 -80,000
1 20,000 0
2 20,000 0
3 20,000 0
4 20,000 0
5 20,000 100,000

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