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A company is faced with two investment opportunities. The corporation utilizes a discount rate of 10 percent. The cash flows for the two projects are:

A company is faced with two investment opportunities. The corporation utilizes a discount rate of 10 percent. The cash flows for the two projects are:

Project A Project B

Year Cash Flow Cash Flow

0 -$100,000 -$80,000

1 40,000 50,000

2 40,000 20,000

3 40,000 30,000

4 30,000 20,000

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