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Suppose there are two expansion projects for a capital budgeting case and the WACC is 16%. Alternative 1: Based on 3 year cash flow Payback
Suppose there are two expansion projects for a capital budgeting case and the WACC is 16%.
Alternative 1: Based on 3 year cash flow Payback period is 2.5 years NPV is $26,000 IRR is23%
Alternative 2: Based on 7year cash flow Payback Period is 5.5 years NPV is $20,000 IRR is 17.05%
Based only on these information, which would be a better choice for the firm?
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