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Consider the following two mutually exclusive projects: Year Cash Flow A Cash Flow B 0 -300 000 -40,000 1 20 000 19 000 2 50

Consider the following two mutually exclusive projects:

Year Cash Flow A Cash Flow B

0 -300 000 -40,000

1 20 000 19 000

2 50 000 12 000

3 50 000 18 000

4 390 000 10 500

If you apply the discounted payback criterion, which investment will you choose? Why? Show work.

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