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Question 1 A company has two projects to choose from with the following annual after-tax cash flows: Project A Year 0 Year 1 Years 2-8

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Question 1 A company has two projects to choose from with the following annual after-tax cash flows: Project A Year 0 Year 1 Years 2-8 - $700,000 - $400,000 $600,000 Project B Year 0 Years 1-8 - $1,600,000 $750,000 The firm's cost of capital is 15 percent. Compute both projects' payback period and discounted payback period. (4 marks)

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