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Project Evaluation XYZ Corporation is choosing between two projects, M and N. Project M costs $700 and generates cash flows of $350 in years 1
Project Evaluation XYZ Corporation is choosing between two projects, M and N. Project M costs $700 and generates cash flows of $350 in years 1 and 2, and $300 in year 3. Project N costs $700 and generates $400 in year 1, and $350 in years 2 and 3.
Requirements:
- Calculate the NPV for both projects at discount rates of 6%, 9%, and 15%.
- Decide which project to accept if the cost of capital is 9%.
- Create a graph showing NPV versus discount rate for both projects.
- Find the rate at which both projects have the same NPV.
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