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Section 1. Question 3. You are evaluating 2 investment options, project A or project B, both giving the same amount of positive NPV. The following
Section 1. Question 3. You are evaluating 2 investment options, project A or project B, both giving the same amount of positive NPV. The following annual cash flows are expected, and you expect 9% return from each investment. Each project requires an initial investment in Year 0, and you have a limited investment fund. Which project should you choose and why? How do you get the expected rate of return at 9%? Year 1 WN Cash Flow (A) $10,000 10,000 10,000 Cash Flow (B) $9,000 11,000 10,000
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