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Sheffield company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $554,000, has an expected useful life of 14 years and
Sheffield company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $554,000, has an expected useful life of 14 years and salvage value of zero, and is expected to increase net annual cash flows by $74,000. Projcrt B will cause $386,000 dollars, has an expected useful life of 14 years and a salvage value of zero, and is expected to increase net annual cash flows by $53,000. A discount rate of 8% is appropriate for both projects. Calculate the Net present value and profitability of each project
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