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Q1. Consider the following two mutually exclusive projects: patogoro Year Cash Flow (A) Cash Flow (B) 0 $416,000 -$35,500 1 48,500 19,500 2. 57,500 14,200

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Q1. Consider the following two mutually exclusive projects: patogoro Year Cash Flow (A) Cash Flow (B) 0 $416,000 -$35,500 1 48,500 19,500 2. 57,500 14,200 74,500 14,100 531,000 10,900 3 4 The required return on these investments is 12 percent. a. What is the payback period for each project? (6) b. What is the NPV for each project? (6) What is the IRR for each project? (6) d What is the profitability index for each project? (6) Based on your answers in (a) through (d), which project will you finally choose? Provide a brief explanation (6) f. Discuss the advantages and disadvantages of any one of the above investment rules. (Bonus 10)

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