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Atlas Corp. is considering two mutually exclusive projects. Both require an initial investment of $11,500 at t=0. Project $ has an eqpected life of 2
Atlas Corp. is considering two mutually exclusive projects. Both require an initial investment of $11,500 at t=0. Project $ has an eqpected life of 2 years with after-tax cash inflows of \$5.500 and \$7.700 at the end of Years 1 and 2, respectively. Project L. has an expected hife of 4 years with aftertax cash inflows of $4,071 at the end of each of the next 4 years. Each project has a WACC of 8.75%, and Project $ can be repented with no changes in its cash flows. The controller prefers Project S, but the CFO prefers Project L. How much value will the firm gain or lose if Project L is seivated over Project S, i.e., what is the value of NPVLNPV ? a. 51,504.05 b. 51,77878 c. $989.51 d. 51.272.64 e. 51,635,66
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