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Information about two independent projects that a company is evaluating: Capital Budgeting Technique Project X Project Y Net present value $5,000 $4,950 Internal rate of
Information about two independent projects that a company is evaluating:
Capital Budgeting Technique | Project X | Project Y |
Net present value | $5,000 | $4,950 |
Internal rate of return | 15.5% | 17.0% |
Discounted payback period | 5.1 years | 4.6years |
(A) Which project(s) should be chosen? Explain why.
(B) What can be concluded about the company's required rate of return, r?
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