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A company is comparing two potential three-year investments at a discount rate of 12%. Project A costs $3,500 but should generate a return of $5,000

  1. A company is comparing two potential three-year investments at a discount rate of 12%. Project A costs $3,500 but should generate a return of $5,000 at the end of the third year, and Project B costs $5,000 but should generate a return of $7,800 at the end of the third year. What is the net present value (NPV) for each project?

  1. Project A: $503.08; Project B: $1,244.80
  2. Project A: $3,558.97; Project B: $5,552.00
  3. Project A: $58.97; Project B: $552.00
  4. Project A: $4,003.08; Project B: $6,244.80

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