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Your division is considering two facility investment projects, each of which requires an upfront expenditure of $15 million. You estimated that the investments will produce

Your division is considering two facility investment projects, each of which requires an upfront expenditure of $15 million. You estimated that the investments will produce the following net cash flows:

Year Project A Project B
1 $5,000,000 $20,000,000
2 $10,000,000 $10,000,000
3 $20,000,000 $6,000,000

What are the project's net present values, assuming the cost of capital is 10%, 5%, 15%. What does this analysis tell you about the projects?

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