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) Darby Inc. has identified the following two mutually exclusive Projects: Year Cash Flow (A) Cash Flow (B) 0 -$17,000 8,000 7,000 5,000 3,000 -$17,000

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) Darby Inc. has identified the following two mutually exclusive Projects: Year Cash Flow (A) Cash Flow (B) 0 -$17,000 8,000 7,000 5,000 3,000 -$17,000 2,000 5,000 9,000 9,500 2 4 If the Cost of Capital is 9 percent, what is the NPV for each of these projects? Which project will you choose if you apply the NPV decision rule? What is the Profitability Index (PI) for these projects? Which project will you choose using the PI decision rule? (15%)

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