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Yale Inc. has two independent investment opportunities, each requiring an initial investment of $260,000. The company's required rate of return is 10 percent. The cash

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Yale Inc. has two independent investment opportunities, each requiring an initial investment of $260,000. The company's required rate of return is 10 percent. The cash inflows for each investment are provided below. Investment A Investment B Year 1 $140,000 $20,000 Year 2 100,000 40,000 Year 3 60,000 60,000 Year 4 40,000 80,000 Year 5 20,000 160,000 Total inflows $360,000 $360,000 Factors: Present Value of $1 Factors: Present Value of an Annuity (r-10%) (r 10%) Factors: Present Value of S1 Factors: Present Value of an Annuity (r = 10%) (r10%) Year 0 1.0000 Year 1 0.9091 Year 1 0.9091 Year 2 0.8264 Year 2 1.7355 Year 3 0.7513 Year 3 2.4869 Year 4 0.6830 Year 4 3.1699 Year 5 0.6209 Year 5 3.7908 Refer to Exhibit 8-3. Calculate the net present value for each investment. Should the company invest in both projects? The company should only invest in Investment A, since it is the only project that has a positive net present value. O There is not enough information to answer this question. O No, they should not invest in either project since both have negative net present values, None of the answer choices is correct Yes, they should invest in both projects since both have positive net present values

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