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ABC Corporation is considering two investment projects. Project A requires an initial investment of $500,000 and is expected to generate cash flows of $100,000 per
ABC Corporation is considering two investment projects. Project A requires an initial investment of $500,000 and is expected to generate cash flows of $100,000 per year for 6 years. Project B requires an initial investment of $700,000 and is expected to generate cash flows of $150,000 per year for 5 years. Assuming a discount rate of 10%, calculate the NPV of each project and recommend the preferable investment.
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