Question
Two mutually exclusive projects, Alpha and Beta have free cash flows listedbelow. The firm has a cost of capital of 15%. Which of the two
Two mutually exclusive projects, Alpha and Beta have free cash flows listedbelow. The firm has a cost of capital of 15%. Which of the two projects should be selected:
|
| Alpha | Beta |
| Year 0 | -$18,920 | -$37,850 |
| Year 1 | $5,000 | $10,000 |
| Year 2 | $5,000 | $10,000 |
| Year 3 | $5,000 | $10,000 |
| Year 4 | $5,000 | $10,000 |
| Year 5 | $5,000 | $10,000 |
| Year 6 | $5,000 | $10,000 |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
