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Consider two investments at a MARR of 12% with the following sequences of cash flows: Period Project A Project B 0 -$4,000 -$3,000 1 $2,000

  1. Consider two investments at a MARR of 12% with the following sequences of cash flows:

Period

Project A

Project B

0

-$4,000

-$3,000

1

$2,000

$300

2

$1,600

$600

3

$1,200

$900

4

$800

$1200

5

$400

$1,500

  1. Do both projects have an acceptable rate of return?
  2. Based on incremental analysis, which project would you select?

Dissection: identify input & output variables and include cash flow table

Solution: identify method

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