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Evaluate the following investment projects using the NPV and IRR methods. Assume a discount rate of 9% for NPV calculations. Project A: Initial Cost: $150,000

Evaluate the following investment projects using the NPV and IRR methods. Assume a discount rate of 9% for NPV calculations.

Project A:

  • Initial Cost: $150,000
  • Year 1: $40,000
  • Year 2: $50,000
  • Year 3: $60,000
  • Year 4: $70,000

Project B:

  • Initial Cost: $200,000
  • Year 1: $60,000
  • Year 2: $70,000
  • Year 3: $80,000
  • Year 4: $90,000

Requirements:

  1. Calculate the NPV for both projects.
  2. Calculate the IRR for both projects.
  3. Recommend which project to undertake based on NPV and IRR results.

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