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b. There are two potential projects, P and Q, with different life horizons. Specifically, P will last for 5 years and Q will last for
b. There are two potential projects, P and Q, with different life horizons. Specifically, P will last for 5 years and Q will last for 7 years. Their cash flows are illustrated in the following table. Year 0 1 2 3 4 5 & 7 P -73 30 30 30 30 30 Q =1 25 25 25 25 25 25 25 The cost of capital is 15%. The difference in their equivalent annual benefits (P minus Q) is closest to: [5 marks]
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