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Benton Exploration Company is considering two mutually exclusive projects. Project A has a cost of $10,000 and is expected to generate net cash flows of
Benton Exploration Company is considering two mutually exclusive projects. Project A has a cost of $10,000 and is expected to generate net cash flows of $4,000 per year for 5 years. Project B has a cost of $25,000 and is expected to generate net cash flows of $9,000 per years for 5 years. Benton's cost of capital is 15 percent.
Based on the net present value (NPV) method, which project should be undertaken?
Group of answer choices
Project A
Project B
Neither
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