Which investment should firm choose if cost of capital

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Consider the following projects, X and Y where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respectively. Which investment should the firm choose if the cost of capital is 25 percent? a. Project Y. b. Project X. c. Neither. d. Not enough information to tell.

Reference no: EM13917501

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