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A company is considering two investment projects: Project A requires an initial investment of $80,000 and generates annual cash flows of $30,000 for five years.

A company is considering two investment projects:

  • Project A requires an initial investment of $80,000 and generates annual cash flows of $30,000 for five years.
  • Project B requires an initial investment of $100,000 and generates annual cash flows of $35,000 for five years. Using the net present value (NPV) method with a discount rate of 8%, determine which project the company should choose.

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