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Harold Coop is considering investing in either ABC or ZYX. Both investments ABC and ZYX cost $10,000. in order to make the purchase, Harold needs
Harold Coop is considering investing in either ABC or ZYX. Both investments ABC and ZYX cost $10,000. in order to make the purchase, Harold needs to obtain a loan from the bank at an interest rate of 7%. The bank is only willing to offer Harold $10,000. The following table outlines the expected net cash flows from each investment Year ZYX $500 1,000 $8,000 5,000 4,000 3,500 6,000 9,000 $20,000 2,000 1,000 $20,000 Total Based on the NPV method, which investment should Harold purchase
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