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Your division is considering two facility investment projects, each of which requires an upfront expenditure of $25 million. You estimated that the investments will produce

Your division is considering two facility investment projects, each of which requires an upfront expenditure of $25 million. You estimated that the investments will produce the following net cash flows:

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?

Year Project A Project B
1 $7,000,000 $21,000,000
2 $12,000,000 $11,000,000
3 $22,000,000 $9,000,000

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