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The State of Ohio is considering the following two mutually exclusive projects

The State of Ohio is considering the following two mutually exclusive projects (i.e., you can’t do both projects) to fund out of its new capital budget. Assuming the State of Ohio has a discount rate of 5%, make a recommendation on which project the State should choose and justify the recommendation numerically.

                                                      Project A                                                               Project B    

                                                Year     Cash Flow                                                   Year                Cash Flow

                                                   0       -$250,000                                                      0                      -$240,000

                                                   1       $45,000                                                          1                       $5,000

                                                   2       $75,000                                                           2                       $120,000

                                                   3       $95,000                                                           3                       $120,000

                                                   4       $118,000                                                        4                       $72,000

May 17 2018 View more View Less

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