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Buy Coastal, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should
Buy Coastal, Inc., imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should it accept either of them? Y
If you apply the NPV criterion, which investment will you choose if you require a 10 percent return on your investment? Explain why.
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\begin{tabular}{|l|l|l|} \hline Year & Cash flow (A) & Cash flow (B) \\ \hline 0 & $60,000 & $90,000 \\ \hline 1 & 19,000 & 14,000 \\ \hline 2 & 25,000 & 17,000 \\ \hline 3 & 18,000 & 14,000 \\ \hline 4 & 16,000 & 90,000 \\ \hline \end{tabular}Step by Step Solution
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