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Problem #1: The table below provides the estimated end-of-year net cash flows that would be received from alternative projects Red and Blue for an investment
Problem #1: The table below provides the estimated end-of-year net cash flows that would be received from alternative projects Red and Blue for an investment of $200,000. Project Red Project Blue Year 1 $40,000 $90,000 Year 2 $60,000 $80,000 Year 3 $80,000 $70,000 Year 4 $123,000 $50,000 (a) Find the NPV of each project if the cost of capital is 6%. (b) In part (a), which project is better? (c) Find the NPV of each project if the cost of capital is 8%. (d) In part (c), which project is better? Problem #1(a): NPV of Projects Red and Blue (in that order), separated with a comma. Answers correct to 2 decimals. (A) Project Blue (B) Project Red Problem #1(b): Select Problem #1(c): NPV of Projects Red and Blue (in that order), separated with a comma. Answers correct to 2 decimals. (A) Project Blue (B) Project Red Problem #1(d): Select Just Save Submit Problem #1 for Grading
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