Question
Your firm has a cost of capital of 18.7%. You are considering two projects. Project A will cost $121,000 and provide benefits of $27,000
Your firm has a cost of capital of 18.7%. You are considering two projects. Project A will cost $121,000 and provide benefits of $27,000 per year for 12 years. Project B will cost $146,000 initially. Project B will provide a benefit of $100,000 in year 1 and then $60,000 per year for an additional 3 years (years 2-4). If these projects are NOT mutually exclusive (meaning you can invest in one, both, or neither), which project(s) should you invest in? If these projects are mutually exclusive, which project should you invest in?
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Accounting For Business
Authors: Peter Scott
3rd Edition
0198807791, 978-0198807797
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