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Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13%. Year Project

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Your firm has estimated the following cash flows for two mutually exclusive capital investment projects. The firm's required rate of return is 13%. Year Project A Cash Flow 0 -$200,000 1 60,000 2 60,000 3 60,000 60,000 5 60,000 Project B Cash Flow -$200,000 88,000 88,000 88,000 4. Which of the following statements best describes projects A and B? Project A should be accepted because it has the highest NPV. Neither project is acceptable. Project A should be accepted because it has the highest EAA. O Project B should be accepted because it has the highest EAA. Both projects should be accepted because they have positive NPVs and EAAs

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