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A company is considering following two alternatives for investment and it must choose only one. The cash flows associated with each alternative is shown. (a)
A company is considering following two alternatives for investment and it must choose only one. The cash flows associated with each alternative is shown. (a) Draw the cash flow of each alternative, fully label your diagrams. (b) Which alternative should the company choose? You are asked to compare the two alternatives based on their capital costs, using an annual 5% interest rate and advise the company which option they should choose and why
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