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Bentley Motors Limited is considering two mutually exclusive projects. Both projects have an estimated cost of $600,000, and their cost of capital is 12%. The
Bentley Motors Limited is considering two mutually exclusive projects. Both projects have an estimated cost of $600,000, and their cost of capital is 12%. The cash flows that the projects are expected to generate are as follows: Year 1 2 3 4 Project A 300,000 100,000 200,000 200,000 Project B 250,000 300,000 100,000 125,000 Bentley Motors Limited uses the net present value (NPV) method to analyze the project. The company should:
a. undertake both projects A and B
b. undertake A not B
c. reject both
d. undertake B not A
e, cannot be determine
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