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Investment A: Year: Cash flow: 0 - $14,000 1 $5,500 2 $5.500 3 $5,500 4 $5,500 5 $5,500 Investment B: Year: Cash flow: 0 -

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Investment A: Year: Cash flow: 0 - $14,000 1 $5,500 2 $5.500 3 $5,500 4 $5,500 5 $5,500 Investment B: Year: Cash flow: 0 - $15,000 1 $5,500 2 $5,500 3 $5,500 4 $5,500 5 $5,500 Investment C: Year: Cash flow: 0 - $18,000 1 $12,000 2 $2.000 3 $2,000 4 $2.000 5 $2,000 The cash flows for three projects are shown above. The cost of capital is 8.5%. If an investor decided to take projects with a payback period two years or less, which of these projects would he take? O A. Investment A OB. Investment B O C. Investment C OD. none of these investments

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