(Answered) Chimay inc has been considering two mutually exclusive

Management Studies

Chimay Inc. has been considering two mutually exclusive projects with the following NPVs and project lives.

Project

NPV

Economic Life

5,000

3 years

6,500

5 years

Chimay Inc. cost of capital is 15%. Assuming that projects can be repeated with the same cash flow and risk profiles what would be the respective Net Terminal Values of projects A and B (round to the next integer)? What should be the decision? Please show work

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Business Management, Management Studies

Category:- Business Management
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