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4. Capital Budgeting: This question has five parts. Here you have to find Net Present Value (NPV) for the two projects. (Show all work.) (15

4. Capital Budgeting: This question has five parts. Here you have to find Net Present Value (NPV) for the two projects. (Show all work.) (15 points)

Expected Net Cash Flows

Year

Project A

Project B

0

($5,000)

($5,000)

1

$700

$750

2

$1,000

$1,250

3

$3,250

$3,000

4

$3,500

$3,250

______ 4a. If the opportunity cost of capital is 10%, what is the NPV of Project A (round to the nearest penny)?

______ 4b. If the opportunity cost of capital is 10%, what is the NPV of Project A (round to the nearest penny)?

4c. If you have a choice between Project A and Project B, which one would you choose and why?

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