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XZ Company is medium sized metal fabricator that is currently contemplating two projects: Project A require an initial investment of $ 45,000, Project B require

XZ Company is medium sized metal fabricator that is currently contemplating two projects: Project A require an initial investment of $ 45,000, Project B require an initial investment of $ 50,000. Assume the NZ Company has a 10% cost of capital and the relevant cash flows for the two projects are presented in the table below: Project Project A Project B Initial Investment 45,000 50,000 Year Operating Cash Flow 1 16000 30000 2 16000 14000 3 16000 12000 4 16000 12000 5 16000 12000 Require: a) Calculate the NPV for Project A and B? (10: Marks) b) Based on your NPV findings in section (a) which project will you recommend for NZ Company? (5: Marks) c) Based on your answer in section (b) justify your recommendation? (5: Marks)

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