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ABC Company is considering two mutually exclusive projects. Project S has an initial cost of $10,000 with expected annual cash flows of $3,000 for the
ABC Company is considering two mutually exclusive projects. Project S has an initial cost of $10,000 with expected annual cash flows of $3,000 for the next five years. Project L has an initial cost of $25,000 with expected annual cash flows of $7,400. ABCs cost of capital is 12%. Calculate the NPV, IRR, and Profitability Index for each project. Which project should ABC choose?
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