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Semper mortgage wishes to select the best of three possible computers, each expected to meet the firm's growing need for computational and storage capacity. The
Semper mortgage wishes to select the best of three possible computers, each expected to meet the firm's growing need for computational and storage capacity. The three computers A B and C are equally risky. The firm plans to use a cost of capital to evaluate each of them. The initial outlay and the annual cash outflows over the life of each computer are shown in the following table:
Cash Outlflows CF
Year t Computer A Computer B Computer C
$$$
A Calculate the NPV for each computer over its life. Rank the computers in descending order, based on NPV
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