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You are evaluating three projects. Project 1 involves an initial investment of $2000 and returns $700 annually for 4 years. Project 2 requires $3000 initially
You are evaluating three projects. Project 1 involves an initial investment of $2000 and returns $700 annually for 4 years. Project 2 requires $3000 initially and provides $1000 per year for 4 years. Project 3 needs $4000 upfront and yields $1200 per year for 4 years.
a) Compute the NPV at a discount rate of 6%.
b) Based on the NPV, determine which project(s) should be accepted.
c) Find the payback period for each project.
d) Which project(s) meet a 2-year payback period requirement?
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