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3. Quattro, Inc. has the following mutually exclusive projects available. The required return is 11 percent. (a) Which project, if any, should the company accept?

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3. Quattro, Inc. has the following mutually exclusive projects available. The required return is 11 percent. (a) Which project, if any, should the company accept? (Use the NPV method) 1 5 Year Cash Flow (A) Cash Flow (B) 0 -$82,000 -$125,000 15,700 38.600 2 18,300 33,400 3 23.900 31.200 4 26,200 27,500 32.100 24,000 (b) Which project, if any, should the company accept assuming that these are independent projects? 4. A project has the following cash flows. What is the internal rate of return (IRR) ?, If the WACC 12% would you accept the project? Years Cash flow -$71.000 8,400 21.900 28,300 33,300 0 2 3 4

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