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Consider the following two projects: Project A Year 0 Cash Flow -100 -73 Year 1 Cash Flow 40 30 Year 2 Cash Flow 50 30

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Consider the following two projects: Project A Year 0 Cash Flow -100 -73 Year 1 Cash Flow 40 30 Year 2 Cash Flow 50 30 Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate 0.15 0.15 B 15) Assume that projects A and B are mutually exclusive. The correct investment decision and the best rationale for that decision is to invest in project A, since NPVB IRRA. invest in project A, since NPVA > 0. invest in project A, since IRRA > IRRB. invest in project B, since NPVB > NPVA

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