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Evaluate the following cash flows for projects O and P: Project O: Year Cash Flow 0 -$85,000 1 $25,000 2 $30,000 3 $35,000 4 $40,000

Evaluate the following cash flows for projects O and P:

Project O:

Year

Cash Flow

0

-$85,000

1

$25,000

2

$30,000

3

$35,000

4

$40,000

Project P:

Year

Cash Flow

0

-$95,000

1

$26,000

2

$32,000

3

$36,000

4

$42,000

a. Compute the NPV, IRR, and payback period for both projects, with a discount rate of 10 percent.

b. Decide which project(s) should be chosen if they are independent and which should be chosen if they are mutually exclusive.

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