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A firm with a WACC of 10% is considering the following mutually exclusive projects: Year Project A Project B 0 -200 -650 1 75 250

A firm with a WACC of 10% is considering the following mutually exclusive projects:

Year Project A Project B

0 -200 -650

1 75 250

2 75 250

3 75 125

4 190 125

5 190 125

Which project would you recommend under NPV method? Explain.

Please explain using formulas and work shown instead of excel spreadsheet. Thank you

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