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Consider the following two mutually exclusive projects: Year 0 1 Project A cash flow -17.000 25 000 Project B cash flow -5250 9 500 a)
Consider the following two mutually exclusive projects:
Year 0 1 Project A cash flow -17.000 25 000 Project B cash flow -5250 9 500
a) If the required rate of retum is ( 10% ) calculate the Net Present Value (NPV) of each project. Which project would you choose? Why? b) Calculate the Internal Rate of Return (IRR) for each project? Which project would you choose? Why?
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