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Blossom Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $454,000, has an expected useful life of 13 years and
Blossom Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $454,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $68,000. Project B will cost $300,000, has an expected useful life of 13 years and a salvage value of zero, and is expected to increase net annual cash flows by $47,000. A discount rate of 9% is appropriate for both projects.
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