Cash flows for two mutally exclusive projects

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Reference no: EM131332319

Below are the cash flows for two mutally exclusive projects.

Year A B

0 -100 -100

1 30 49

2 50 49

3 70 49

Draw NPV profiles for both projects on the same plane.

Which project would you choose if the opportunity cost of capital is 2%?

Which project would you choose if the opportunity cost of capital is 12%?

Does your answer change? Why?

Reference no: EM131332319

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