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Two mutually exclusive investment projects have the following forecasted cash flows: A -$26,000 +10,000 11 +10,000 +10,000 +10,000 +50,000 Use Table II and Table IV
Two mutually exclusive investment projects have the following forecasted cash flows: A -$26,000 +10,000 11 +10,000 +10,000 +10,000 +50,000 Use Table II and Table IV to answer the questions. Year 0 1 2 3 4 B % -$26,000 0 0 0 a. Compute the internal rate of return for each project. Round your answers to one decimal place. IRRA: % IRRB: b. Compute the net present value for each project if the firm has a 12 percent cost of capital. Round your answers to the nearest dollar. NPVA: $ NPVB: $ c. Which project should be adopted? Why? -Select- should be chosen because it has the higher -Select- . It is assumed that the firm's reinvestment opportunities are more accurately represented by the -Select
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