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Table 10.4 A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows: Project A Initin End-of-Year Investment
Table 10.4 A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows: Project A Initin End-of-Year Investment Cash Flows $40,000 $20,000 20,000 20,000 Project B Initial End-of-Year Investment Cash Hows $90,000 $40,000 40,000 80,000 The new financial analyst does not like the payback approach (Table 10.4) and determines that the firm's required rate of return is 15 percent. His recommendation would be to o accept project A and reject B. reject both reject project A and accept B. accept projects A and B
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