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Dillard's has a cost of capital of 9% and must choose from the following two mutually exclusive investment opportunities: Opportunity Expected life NPV A 6

Dillard's has a cost of capital of 9% and must choose from the following two mutually exclusive investment opportunities:

Opportunity Expected life NPV

A 6 years $2 million

B 4 years $1.5 million

-- Is accepting the investment with the higher NPV (investment A) necessarily the best choice?

-- What is the NPV per year for each project?

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