onsider two mutually exclusive R&D projects that Savage Tech is considering. Assume the discount rate for both
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Question:
onsider two mutually exclusive R&D projects that Savage Tech is considering. Assume the discount rate for both projects is percent.
Project A: Server CPU micron processing project
By shrinking the die size to micron, the company will be able to offer server CPU chips with lower power consumption and heat generation, meaning faster CPUs.
Project B: New telecom chip project
Entry into this industry will require introduction of a new chip for cell phones. The knowhow will require a large amount of upfront capital, but success of the project will lead to large cash flows later on
Year Project A Project B
$ $
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