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problem: 2 mutually exclusive investment projects have the following forecasted cash flows:

Year 0:  (A) $-20,000     (B) $-20,000

Year 1:  (A) $10,000       (B) 0

Year 2:  (A) $10,000       (B) 0

Year 3:  (A) $10,000       (B) 0

Year 4:  (A) $10,000       (B) $60,000

[A] find out the net present value for each project if the firm has a 10 percent cost of capital

[B] find out the internal rate of return for each project

[C] Which project should be adopted? describe.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918410

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