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Project A Project Initial Investment (CF) $12.900 $12.900 Outcome Annual cash inflows (CF) Pessimistic $900 $1.560 Most likely 1,560 Optimistic 2.440 1,770 a. Determine the
Project A Project Initial Investment (CF) $12.900 $12.900 Outcome Annual cash inflows (CF) Pessimistic $900 $1.560 Most likely 1,560 Optimistic 2.440 1,770 a. Determine the range of annual cash inflows for each of the two projects. b. Assume that the firm's cost of capital is 10.1% and that both projects have 15-year lives. Construct a table showing the NPVs for each project for each of the possible comes include the range of NPVs for each project c. Do parts (a) and (b) provide consistent views of the two projects? Explain d. Which project do you recommend? Why
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
