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Labeau Products, Ltd., of Perth, Australia, has $55,000 to invest. The company is trying to decide between four alternative uses for the funds as follows:
Labeau Products, Ltd., of Perth, Australia, has $55,000 to invest. The company is trying to decide between four alternative uses for the funds as follows: Project L Project M Project N Project O Investment required $55,000 $55,000 $55,000 $55,000 Annual cash inflows $28,000 $15.000 Single cash inflow at the end of 5 years $200,000 $100.000 Life of the project 5 years 5 years 5 years 5 years NPV of the project $41,124 $48.800 ($3,505) ($3,100) The company's discount rate is 14%. Based on NPV alone, which project would you recommend that the company accept? Multiple Choice Project O Project M Project L O O O Project N
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