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Project A costs $275,000 and offers seven annual net cash inflows of $59,000. Smith Products requires an annual return of 14% on projects like A.
Project A costs $275,000 and offers seven annual net cash inflows of $59,000. Smith Products requires an annual return of 14% on projects like A. Project B costs $395,000 and offers ten annual net cash inflows of $72,000. Smith Products demands an annual return of 12% on investments of this nature. What is the NPV of each project? What is the maximum acceptable price to pay for each project
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