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Question-3: ABC has been considering two mutually exclusive projects with the following NPVs and project lives. Project NPV Economic Life A 5,000 3 years B

Question-3: ABC has been considering two mutually exclusive projects with the following NPVs and project lives. Project NPV Economic Life A 5,000 3 years B 6,500 5 years ABCs cost of capital is 15%. Assuming that projects can be repeated with the same cash flow and risk profiles what would be the respective ANPVs of A and B and their perpetual values? Which project ABC should choose? YOUR SOLUTION:

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