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3) Consider the three projects with cashflows at year-ends shown below. The initial outlay for all three is 200 and assume annual compounding throughout a)

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3) Consider the three projects with cashflows at year-ends shown below. The initial outlay for all three is 200 and assume annual compounding throughout a) Based on P-V analysis, and a 20% discount rate, which project do you invest in? b) Based on total return, using a 5% reinvestment rate, which project do you invest in? Year Proj 1 Proj 2 Proj 3 1 50 150 100 125 100 75 150 150 125

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