Compare the two mutually exclusive projects

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Compare the following two mutually exclusive projects on the basis of ARR. Cash flows and salvage values are in thousands of dollars. Use the straight-line depreciation method and decide which project should be chosen.

Year Project A Income Project B Income

0 220000 198000

1 91000 87000

2 130000 110000

3 105000 84000

4(Salvage Value) 10,000 18,000

Reference no: EM132502601

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