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A company estimates that the appropriate discount rate (i.e. the cost of capital) for Project A. Project B. Project C and Project D described below
A company estimates that the appropriate discount rate (i.e. the cost of capital) for Project A. Project B. Project C and Project D described below is 10 percent. Assuming that the projects are independent, which projects) should the company accept? Project A requires an up-front expenditure of $1000,000 and generates a net present value of $3.200. Project B has an internal rate of return of 9.5 percent. Project C requires an up-front expenditure of $1.000.000 and has a profitability index of 0.85 Project D requires an up-front expenditure of $200.000 and generates a net present value of negative $200. None of the projects above should be accepted
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