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Zeta Ltd. has two project options. Project G requires an initial investment of $45,000 with expected cash flows of: Year 1: $12,000 Year 2: $15,000
Zeta Ltd. has two project options. Project G requires an initial investment of $45,000 with expected cash flows of:
- Year 1: $12,000
- Year 2: $15,000
- Year 3: $18,000
Project H requires an initial outlay of $55,000 with projected cash flows of:
- Year 1: $16,000
- Year 2: $20,000
- Year 3: $24,000
- Compute the NPV for each project at a 10% discount rate.
- Calculate the IRR for each project.
- Evaluate the Profitability Index (PI) for each project.
- Assess which project Zeta Ltd. should invest in based on NPV, IRR, and PI.
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