Question
Siegmeyer Corp. is considered a new inventory system, Project A, that wil cost $750,000. The system is expected to generate positive cash flows over the
Siegmeyer Corp. is considered a new inventory system, Project A, that wil cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four.Siegmeyer's required rate of return is 8%. Suppose Siegmeyer identifies another mutually exclusive project, Project B, with a net present value of $98,525.50 and IRR of 17.33%. If neither project can be replaced, compared to the values calculated in Problems 7 and 9 Siegmeyer should accept
a. Project A
b. Project B
c. Both projects
d neither project
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