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You are considering two mutually exclusive projects with the following cash flows

You are considering two mutually exclusive projects with the following cash flows:

Project

C/F0

C/F1

C/F2

C/F3

C/F4

C/F5

C/F6

A

$(41,215)

$12,500

$14,000

$16,500

$18,000

$20,000

N/A

B

$(46,775)

$15,000

$15,000

$15,000

$15,000

$15,000

$15,000

Assuming that the discount rate for project A is 16% and the discount rate for B is 15%, then given that these are mutually exclusive projects, which project would you take and why?

2. If you are one of the management teams, when making a capital budgeting decision, what cost would you consider?

May 24 2018 View more View Less

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