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Suppose that a company considers two alternative expansion projects.

First requires $100,000

Second cost 7,000

Subsequent incremental cash flows from the more expensive project will be $60,000 for 5 years.

The cash flow from second will be lower. 4,000 for 3 years.

Which expansion project would you recommend & why ?

WACC = 8%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93052903

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