Q10. Andrew Oxnard, chief financial officer, has been asked by Harry Pendel, chiefexecutive officer and co-founder of Pendel & Braithwaite, Ltd. (P&B), to analyze two capitalinvestment projects (projects A and B), which are expected to generate the following profit (p)streams:

ProfitStreams forProjectsA and B

Period,t	($)	($)
1	100,000	350,000
2	200,000	300,000
3	250,000	200,000
4	300,00	100,000
5	325,000	100,000
Total	1,175,000	1,050,000

Profits are realized at the end of each period. Assuming that P&B is a profit maximizer if thediscountrateforbothprojects is12%,which ofthe twoprojects shouldbeadopted?

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Q11.Afirmhas thefollowingtotalrevenueandtotalcostfunctions: