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Consider the after - tax cash flows for Project S and Project L: Project S Project L Year 1 $ 3 0 0 0 0
Consider the aftertax cash flows for Project S and Project L:
Project S
Project L
Year
$
Year
$
A rational investor would prefer
A
neither investment over the other
B
information about profits instead of cash flows
C
Project L because they can avoid taxes by receiving cash flows later
D
Project S because the money can be reinvested sooner
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