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Each project cost $130,000 and your cost of capital is 8% p.a. effectively. Using NPV rule, which project should you choose? A. Annuity of $26,000
Each project cost $130,000 and your cost of capital is 8% p.a. effectively. Using NPV rule, which project should you choose? A. Annuity of $26,000 for 20 years, starting at the end of year 1. B. Perpetual payment of $13,000, starting at the end of year 1 C. Perpetual growing payment. The first payment is $6,500 at the end of year 1, with a growth rate of 2%. D. Growing annuity for 20 years. The first payment is $19,500 at the end of year 1, with a growth rate of 2%
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