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Investment A: Year: 0 1 2 3 4 5 ($ -14,000) $6,000 $6,000 $6,000 $6,000 $6,000 Investment B: Year: 0 1 2 3 4 5
Investment A: Year: 0 | 1 | 2 | 3 | 4 | 5 |
($ -14,000) | |||||
$6,000 | $6,000 | $6,000 | $6,000 | $6,000 | |
Investment B: | |||||
Year: 0 | 1 | 2 | 3 | 4 | 5 |
($ -15,000) | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
Investment C: | |||||
Year: 0 | 1 | 2 | 3 | 4 | 5 |
($ -18,000) | $12,000 | $2,000 | $2,000 | $2,000 | $2,000 |
The cash flows for three projects are shown above. The cost of capital is 9.5%. If an investor decided to take projects with a payback period two years or less, which of these projects would he take? Please show work, thank you |
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