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Question 2 A company is planning to invest on a transport infrastructure project. There are two project proposals with different requirements on initial amount of
Question 2 A company is planning to invest on a transport infrastructure project. There are two project proposals with different requirements on initial amount of investment, annual profit, and salvage value. Assume income tax 20% and straight-line depreciation. Find cash flow after tax and net present value of the two investments. Which one should the company choose (MARR=12%)? Year Pro. No. 2 ($million) Pro. No. 1 ($million) -900 200 220 (including salvage value 20) -700 1-6(each) 170 220 (including salvage value 50)
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