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QUESTION 2 [CLO-3] Yours Tech, a large manufacturing company, is considering two new projects. Only one of these projects can be undertaken at a time.

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QUESTION 2 [CLO-3] Yours Tech, a large manufacturing company, is considering two new projects. Only one of these projects can be undertaken at a time. The cash flows of the two mutually exclusive projects are as follows. Assume the discount rate for Yours Tech is 9% percent. Year Project 1 Project 2 0 -900 -900 1 800 100 2 180 500 0 600 1. What is the payback period for each project? What do you conclude? 2. What is the NPV for each project? What do you conclude? 3. What is the shortcoming of the payback period rule in this situation. Explain

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