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(Mutually exclusive projects and NPV)You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A
(Mutually exclusive projects and NPV)You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
Year | Project A Cash Flow | Project B Cash Flow |
---|---|---|
0 | $(110,000) | $(110,000) |
1 | 31,000 | 0 |
2 | 31,000 | 0 |
3 | 31,000 | 0 |
4 | 31,000 | 0 |
5 | 31,000 | 240,000 |
If the appropriate discount rate on these projects is 12 percent, which would be chosen and why?
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