Your company is considering two projects with the following details Project I Initial Investment $2,500,000 Cash inflows of $700,000 per year for 5 years Project J Initial Investment $3,000,000 Cash inflows of $800,000 per year for 5 years a Calculate the NPV at a discount rate of 8 b Determine the IRR c Analyze the profitability index d Which project would you recommend and why

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Your company is considering two projects with the following details: Project I Initial Investment: $2,500,000 Cash inflows of $700,000 per year for 5 years. Project

Your company is considering two projects with the following details:

Project I

Initial Investment: $2,500,000
Cash inflows of $700,000 per year for 5 years.

Project J

Initial Investment: $3,000,000
Cash inflows of $800,000 per year for 5 years.

a. Calculate the NPV at a discount rate of 8%. b. Determine the IRR. c. Analyze the profitability index. d. Which project would you recommend and why?

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