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Question 5 ( 1 5 points ) Amphibian Inc is considering three mutually exclusive projects, Projects A , B , and C . The initial
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Amphibian Inc is considering three mutually exclusive projects, Projects and C
The initial investment for Project A is $ and is expected to generate aftertax
cash flows of $ per year for five years. Project requires an initial investment
of $ and is expected to generate aftertax cash flows of $ per years for
three years. Project requires an initial investment of $ and is expected to
generate $ per year for four years. All projects can be replicated. The required
rate of return for A B and C are and respectively.
i Estimate the NPV of each project
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ii Estimate the payback period for each project.
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iii. Which project should the company undertake and why?
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