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Year B 0 1 0 2 0 Two mutually exclusive investment projects have the following forecasted cash flows: A -$20,000 -$20,000 +11,000 +11,000 +11,000 +11,000
Year B 0 1 0 2 0 Two mutually exclusive investment projects have the following forecasted cash flows: A -$20,000 -$20,000 +11,000 +11,000 +11,000 +11,000 +55,000 Use Table II and Table IV to answer the questions. a. Compute the internal rate of return for each project. Round your answers to one decimal place. IRRA: % 3 0 4 IRRB: % b. Compute the net present value for each project if the firm has a 10 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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