Business, 05.05.2020 22:34 elreemali03

Ace Inc. is evaluating two mutually exclusive projects—Project A and Project B. The initial cash outflow is $50,000 for each project. Project A results in cash inflows of $15,625 at the end of each of the next five years. Project B results in one cash inflow of $99,500 at the end of the fifth year. The required rate of return of Ace Inc. is 10 percent.
1. Ace Inc. should invest in .
O Project B because it has a higher net present value (NPV).
O Project A because it will generate cash in the initial years of its life.
O Project B because it has no cash inflows in the first four years of its life.
O Project A because it has a positive net present value (NPV).
O Project A because it will yield cash every year for five years.

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Ace Inc. is evaluating two mutually exclusive projects—Project A and Project B. The initial cash out...