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Company K is considering two mutually exclusive projects. The cash flows of the projects are as follow:

Year Project A Project B
0 -$2,000,000 -$2,000,000
1 500,000
2 500,000
3 500,000
4 500,000
5 500,000
6 500,000
7 500,000 5,650,000

a) Compute the NPV and IRR for the above two projects, assuming a 14% requited rate of return
b) Discuss the ranking conflict
c) What decision should be made regarding these two projects?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9859303

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