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Assume a $50,000 investment and the following cash flows for two alternatives: year Investment X Investment Y 1 $ 8,000 $ 18,000 2 9,000 22,000

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Assume a $50,000 investment and the following cash flows for two alternatives: year Investment X Investment Y 1 $ 8,000 $ 18,000 2 9,000 22,000 3 14,000 15,000 20,000 5 25,000 (a) Which of the alternatives would you select using IRR method? (b) Which of the alternatives would you select using the profitability index method? 4

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