Question you are considering two mutually exclusive, Ask an Expert

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Question: You are considering two mutually exclusive projects with the following cash flows. The appropriate cost of capital for Project A is 10%. The appropriate cost of capital for Project B is 14%. Find the Profitability Index and Payback Period of each project. Make sure to show your work.

	Year 0	Year 1	Year 2	Year 3
Project A	-$1,000	$500	$600	$700
Project B	-$10	$10	$20	$30

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