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Consider the cash flows for two proposed capital budgeting projects given below. The cost of capital is 12% for both projects. Year 0 1 2

Consider the cash flows for two proposed capital budgeting projects given below. The cost of capital is 12% for both projects.

Year

0

1

2

3

4

Project A

-20,000

8,000

8,000

6,000

8,000

Project B

-10,000

4,000

5,000

4,000

3,000

Project Bs NPV is calculated as $2311.07, its IRR is 23.1%, and its payback period is 2.25 years.

  1. Calculate the NPV for Project A.
  2. Calculate the IRR for Project A.
  3. Calculate the Payback for Project A.
  4. If they are independent projects, whats your acceptance/rejection decision? And why?

If they are mutually exclusive projects, whats your acceptance/rejection decision? Any why?

Please show work - nothing on calculator

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