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A firm has a choice of undertaking a project now or next year. The cash flows in the two cases are as follows Time 0

A firm has a choice of undertaking a project now or next year. The cash flows in the two cases are as follows

Time 0 1 2 3

Start now - 10 12 18 0

Start next year 0 -8 13 17

When should the firm undertake the project if the discount rate is 5 percent

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