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ABC Company is considering two mutually exclusive investment projects: Project A and Project B. Project A requires an initial investment of $200,000 and is expected
ABC Company is considering two mutually exclusive investment projects: Project A and Project B. Project A requires an initial investment of $200,000 and is expected to generate net cash flows of $80,000 per year for five years. Project B requires an initial investment of $250,000 and is expected to generate net cash flows of $75,000 per year for seven years. The company's cost of capital is 10%. Perform a detailed NPV analysis for both projects and recommend which project the company should undertake.
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