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Consider the following two mutually exclusive investment projects: A B n Cash Flow Salvage Value Cash Flow Salvage Value 0 1 $14,000 $3,000 -$3,000 -$3,000
Consider the following two mutually exclusive investment projects: A B n Cash Flow Salvage Value Cash Flow Salvage Value 0 1 $14,000 $3,000 -$3,000 -$3,000 $3,000 -$3,000 $12,000 $3,100 -$3,100 $3,100 N $7,000 $5,000 $4,000 $3,000 $3,000 $7,000 $4,000 $2,000 3 4 5 Both projects will be available (and can be repeated) with the same costs and salvage values for an indefinite period. (a) With an infinite planning horizon, which project is a better choice at MARR= 12%? (b) With a 10-year planning horizon, which project is a better choice at MARR= 12%
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