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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?

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