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ABC Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. WACC:

ABC Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable.

WACC: 10.25%

Year 0 1 2 3 4

CFS -$2,050 $750 $760 $770 $780

CFL -$4,300 $1,500 $1,518 $1,536 $1,554

Find the NPV of each project

What are IRR of each project?

Which project do you choose? Why? Explain fully.

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