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You are in charge of making investment decisions in your company. You are presented with the following three projects: 8. Building a Warehouse Buying a

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You are in charge of making investment decisions in your company. You are presented with the following three projects: 8. Building a Warehouse Buying a machine Capital Cost $3,945,500 Purchasing a Plant Capital cost $3,150,000 Net Cash inflows Year 1 $630,800 Year 2 $1,352,250 Year 3 $1,320,540 Year 4 $1,005,350 Capital Cost $2,980,000 Net Cash inflows Year 1 $725,000 Year 2 S1,615,300 Year 3 $1,425,000 Year 4 $1,525,450 Net Cash inflows Year 1 $715,325 Year 2 $1,342,100 Year 3 S1,101,180 Year 4 $875,675 If your company expects a 10% rate of return on its investment, compute the NPV of each project ) Which one of the project Gif any) will you recommend to your company (ii) Why would you recommend the selected project? (5 marks) (5 marks) F6 F1 F2 F3

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