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FIN- Consider Project X and another Project, Project Y, with net cash flows

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Question;Consider Project X and another Project, Project Y, with net cash flows as follows:---- Net Cash Flows ----Project X Project YInitial Cost at T-0 (Now) ($10,000) ($20,000)cash inflow at the end of year 1 6,000 4,000cash inflow at the end of year 2 4,000 8,000cash inflow at the end of year 3 2,000 12,000a. Construct NPV Profiles for these two projects, assuming your firm?s required rate of return is 10%.b. If the two projects were mutually exclusive, which would you accept if your firm?s cost of capital were 4%? Which would you accept if your firm?s cost of capital were 10%?

 

Paper#50201 | Written in 18-Jul-2015

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