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Axis Corp is considering investment in the best of two mutually exclusive projects Project Kelvin involves an overhaul of the existing system it will cost and generate cash inflows of

Axis Corp. is considering investment in the best of two mutually exclusive projects. Project Kelvin involves an overhaul of the existing system; it will cost $45,000 and generate cash inflows of $20,000 per year for the next 3 years. Project Thompson involves replacement of the existing system; it will cost $275,000 and generate cash inflows of $60,000 per year for 6 years. Using an 8% cost of capital, calculate each project’s NPV, and make a recommendation based on your findings.

Jun 03 2021 View more View Less

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