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A firm has two possible investments with the following cash inflows. Each in-vestment costs $480, and the cost of capital is ten percent.cash InflowsaBYear 1$300$20022002003100200a.Based
A firm has two possible investments with the following cash inflows. Each in-vestment costs $480, and the cost of capital is ten percent.cash InflowsaBYear 1$300$20022002003100200a.Based only on visual inspection, which investment is to be preferred and why?b.Based on each investments net present value, which investment(s) should the firm make?c.Based on each investments internal rate of return, which investment(s) should the firm make? Is this the same answer you obtained in part b?d.If the cost of capital were to increase to 14 percent, which investment(s) should the firm make
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