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A company is considering the following two projects. The Companys WACC is 12%. Project #1 Initial cost = $10,000 (n=0) Forecasted cashflows expected to be
A company is considering the following two projects. The Companys WACC is 12%. Project #1 Initial cost = $10,000 (n=0) Forecasted cashflows expected to be generated by project $6,500 (n=1) $3,000 (n=2) $3,000 (n=3) $1,000 (n=4) Project #2 Initial cost = $10,000 (n=0) Forecasted cashflows expected to be generated by project $3,500 (n=1) $3,500 (n=2) $3,500 (n=3) $3,500 (n=4)
1. Calculate the NPV and IRR of each project
2. Which project(s) should be accepted?
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