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4) Two cashflows A and B consist of three payments at t = 0,1, 2 where t is in years. Cashflow A is CA =
4) Two cashflows A and B consist of three payments at t = 0,1, 2 where t is in years. Cashflow A is CA = 1, CA = -3.2, CA = -1.2 while cashflow B is CB = 2, CA = -5.35, CA = -.045. Find the effective annual interest rates where the NPV of cashflow A is larger than the NPV of cashflow B (assuming we use the same rate for both cashflows!)
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