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Project Investment Company JKL is considering two investments, G and H. Investment G costs $650 and generates $350 annually for 2 years. Investment H costs
Project Investment Company JKL is considering two investments, G and H. Investment G costs $650 and generates $350 annually for 2 years. Investment H costs $650 and generates $400 in year 1 and $300 in year 2.
Requirements:
- Compute the NPV for both investments at discount rates of 5%, 10%, and 15%.
- Identify which investment should be chosen if the cost of capital is 10%.
- Generate NPV profiles for both investments.
- Determine the crossover rate.
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