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Bob's Lawnmowing has two projects to choose from a manufacturing building renovation or a rebuild of the manufacturing building. The cash flows of the two
Bob's Lawnmowing has two projects to choose from a manufacturing building renovation or a rebuild of the manufacturing building. The cash flows of the two project opportunities are represented in this table: Time 0 2 3 4 300 Rebuild -1500 300 400 600 800 Renovation -2500 600 900 600 The company believes the relevant cost of capital is 5%. Which project should the company select and how much room for error is there for this cost of capital? Please illustrate with a basic graph/plot (only the key data points should be labelled). Bob's Lawnmowing has two projects to choose from a manufacturing building renovation or a rebuild of the manufacturing building. The cash flows of the two project opportunities are represented in this table: Time 0 2 3 4 300 Rebuild -1500 300 400 600 800 Renovation -2500 600 900 600 The company believes the relevant cost of capital is 5%. Which project should the company select and how much room for error is there for this cost of capital? Please illustrate with a basic graph/plot (only the key data points should be labelled)
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