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Q.4 You work for a company which expects to earn at least 18 percent on its investments. You have to choose between two similar projects.

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Q.4 You work for a company which expects to earn at least 18 percent on its investments. You have to choose between two similar projects. Your analysts predict that inflation rate will be a stable 3 percent over the next 7 years. Below is the cash flow information for each project. Which of the two projects would you fund if the decision is based only on financial information? Why? [5 marks]

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