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Anne is considering two independent projects with 2-year lives. Both projects have been assigned a discount rate of 13 percent. She has sufficient funds to
Anne is considering two independent projects with 2-year lives. Both projects have been assigned a discount rate of 13 percent. She has sufficient funds to finance one or both projects. Project A costs $38,500 and has cash flows of $19.400 and $28.700 for Years 1 and 2. respectively. Project B costs $41,000, and has cash flows of $25,000 and $22.000 for Years 1 and 2, respectively. Which project, or projects, if either should you accept based on the profitability index method and what is the correct reason for that decision? Muple Choice You should only accept Project A since & the only project with a Pt greater than 1 Nether prig You should accept both projects since both of the Ps are positive You should accept Project A since it has the higher P and you can only select one project
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