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2. Your company is deciding between 2 different projects. The firm's cost of capital is 8% Project A: The initial investment is $1,000,000. The
2. Your company is deciding between 2 different projects. The firm's cost of capital is 8% Project A: The initial investment is $1,000,000. The project will last for 4 years and the cash flows are expected to be $320,000 per year. Project B: The initial investment is $1,200,000. The project will last for 4 years and the cash flows are expected to be $375,000 per year. Calculate the NPV for both projects. What is your decision is the projects are mutually exclusive? What is your decision of the projects are independent?
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Project A Initial investment 1000000 Expected annual cash flow 320000 Project duration ...
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Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Arab World Edition
1408271583, 978-1408271582
