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Consider two projects described in the following tables, with a required return rate of 8% and an inflation rate of 3%, answer the following: (a)
Consider two projects described in the following tables, with a required return rate of 8% and an inflation rate of 3%, answer the following:
(a) The discount rate in year 2 is
(b) For project A, the discounted cash flow in year 3 is:
(c) For project A, the discounted payback period is:
(d) For project A, the NPV at the end of year 4 is:
(e) For project B, the discounted cumulative at the end of year 2 is:
(f) For project B, the discounted payback period is:
(g) For project B, the NPV at the end of year 4 is:
Project A Year Revenue Investment 0 $100,000 1 N $20,000 $50,000 $100,000 $100,000 3 4 Project B Year Revenue Investment $200,000 0 1 2 $80,000 $100,000 $150,000 $30,000 3 4Step by Step Solution
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