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Labeau Products, Ltd., of Perth, Australia, has $24,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:
Labeau Products, Ltd., of Perth, Australia, has $24,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: Invest in Invest in Project X Project Y $24,000 24,000 Investment required Annual cash inflows Single cash inflow at the end of 6 years Life of the project $ 8,000 $44,000 6 years 6 years The company's discount rate is 14%. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables
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