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Hospital room disinfection system supplier Xenex Inc. has a 12% cost of capital. It adds or subtracts 2 percentage points to the discount rate to
Hospital room disinfection system supplier Xenex Inc. has a 12% cost of capital. It adds or subtracts 2 percentage points to the discount rate to objectively evaluate projects and adjust for risk.Two incompatible initiatives are being considered. Four years and $200,000 for both. Both projects are cost-based because neither is expected to generate cash flows. However, Project A is riskier than Project B. Which project should Xenex fund?
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