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Callaway Associates, Inc. is considering the following mutually exclusive projects. Callaway's cost of capital is 12%. Project A PROJECT B 0 ($25,000) ($80,000) 1 $44,000
Callaway Associates, Inc. is considering the following mutually exclusive projects. Callaway's cost of capital is 12%.
Project A PROJECT B
0 ($25,000) ($80,000)
1 $44,000 $65,000
2 $34,000 $30,000
3 $14,000 $ 0
4 $14,000 $5,000
a. Calculate each project's NPV and IRR.
b. Which project should be undertaken ? Why?
a.
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