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Author Question: You are evaluating two projects. You may accept only one of them. Project one will cost $379,000 ... (Read 69 times)

ap345

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You are evaluating two projects. You may accept only one of them. Project one will cost $379,000 initially and will pay $134,000 each year for the next 5 years. Project two will cost $454,000 initially, but will pay $101,000 for the next 10 years. The firm's cost of capital is 15%. Compute the NPV of each project. Which project has the highest NPV and by how much? Round your answers to the nearest dollar.
◦ Project 2 has a higher NPV by $17,293.
◦ Project 2 has a higher NPV by $37,636.
◦ Project 1 has a higher NPV by $17,293.
◦ Project 1 has a higher NPV by $37,636.
◦ The two projects have equal NPV.


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Marked as best answer by ap345 on Apr 25, 2021

enass

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ap345

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Reply 2 on: Apr 25, 2021
Wow, this really help


Missbam101

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Reply 3 on: Yesterday
Excellent

 

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