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Business, 26.05.2020 21:04 saintsfan2004

Your company is trying to decide which one of two projects it should accept. Both projects have the same start-up costs. Project 1 will produce annual cash flows of $52 000 at the end of each year for six years. Project 2 will produce cash flows of $39 000 at the beginning of each year for eight years. The company requires a 15% return. Required:

a. Which project should the company select and why?

b. Which project should the company select if the interest rate is 12% at the cash flows in Project 2 is also at the end of each year?

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