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1. Consider the two mutually exclusive projects in the table below. The salvage value for each project at the end of each year is

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1. Consider the two mutually exclusive projects in the table below. The salvage value for each project at the end of each year is also presented in the table below. If the planning period is indefinite which project would you chose based on the net present worth criterion at MARR of 13% per year? (All amounts are in SR) NOTE: Both projects B1 and B2 will be available (or can be repeated) with the same costs and salvage values for an indefinite period. PROJECT A n 0 1 2 3 4 5 CASH FLOW - 80 000 - 8 500 - 8 500 - 8 500 - 8 500 - 8500 SALVAGE VALUE 40 000 35 000 20 000 10 000 7 500 CASH FLOW - 70 000 - 10 000 - 10 000 - 10 000 PROJECT A SALVAGE VALUE 35 000 25 000 15 000

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