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The following information shows expected net cash flows of two new projects a company is considering. The required rate of return on investments is
The following information shows expected net cash flows of two new projects a company is considering. The required rate of return on investments is 10%. Note: Use appropriate factor(s) from the tables provided. (PV of $1. FV of $1. PVA of $1, and FVA of $1) Net Cash Flows Project A Initial investment Year 1 Year 2 Year 3 $ (374,000) 52,400 209,600 262,000 Project B $ (374,000) 166,000 184,000) 184,000 Complete this question by entering your answers in the tabs below. Required A Required B Calculate the net present value for each project. Project A Year 1 Year 2 Year 3 Totals Initial investment Net present value Project B Year 1 Year 2 Year 3 Totals Initial investment Net present value S Net Cash Flows 52,400 209,600 262,000 $ 524,000 $ 166,000 184,000 184,000 $ 534,000 Present Value of Present Value of 1 at 10% Net Cash Flows S 0 S 0 S S 0 Complete this question by entering your answers in the tabs below. Required A Required B Assume the company can choose only one project. Which project should it choose based on net present value? Which project should it choose based on net present value?
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