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Consider the following cash flows of two mutually exclusive projects A and B Cost of Capital is 10% and the benchmark for PB is 3

Consider the following cash flows of two mutually exclusive projects A and B

Cost of Capital is 10% and the benchmark for PB is 3 years

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YEAR Cash Flow (A) Cash Flow (B)
0 -$54,000 -$23,000
1 12,700 11,600
2 23,200 11,200
3 27,600 12,500
4 46,500 6,000

a. Find NPV, IRR, Profitability Index, and Payback of Project A

b. Find NPV, IRR, Profitability Index, and Payback of Project B

c. Find Crossover rate between projects A and B

d. Give your complete decision to accept and reject. Explain the reasons in detail for your decision.

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