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You are considering two independent (not mutually exclusive) projects both of which have been assigned a discount rate of 15%. Based on the profitability index,

You are considering two independent (not mutually exclusive) projects both of which have been assigned a discount rate of 15%. Based on the profitability index, what is your recommendation concerning these projects?

Project A Project B

Year Cash Flow Year Cash Flow

0 - $46,000 0 - $50,000

1 + $32,000 1 + $18,000

2 + $27,000 2 + $54,000

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