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Please help Solving. Thank you. The CFO at Rabbit Corporation has asked you to analyze two proposed capital investments, Projects A and B. Each project

Please help Solving. Thank you.

The CFO at Rabbit Corporation has asked you to analyze two proposed capital investments, Projects A and B. Each project has a cost of $10,000, and the cost of capital is 12% for each. The projects expected net cash flows are as follows:

year 0

Project 1 (10,000)

Project 2 (10,000)

1

6,500

3,500

2

3,000

3,500

3

3,000

3,500

4

1,000

3,500

  1. Calculate each projects payback period.
  2. Calculate each projects net present value (NPV).
  3. Calculate each projects internal rate of return (IRR).
  4. Calculate each projects profitability index (PI).
  5. Which project or projects should be accepted if they are independent?

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