Project a generates 500000 in revenue two years from today, Ask an Expert

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Project A generates $5,000.00 in revenue two years from today and costs $4,000.00. Project B generates $4,000.00 (50% probability) or $6,000.00 (50% probability) one year from today and costs $4,500.00. Assuming a discount rate of 12% for both projects, which project does a risk averse manager prefer?

a. Project A

b. Project B

c. Neither project

d. Cannot be determined

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91600473

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