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What is your decision if the projects are mutually exclusive

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Reference no: EM132757127

Question - Rich Computer Services has the following three investment projects available this year. The firm's cost of capital is 7 %. You are required to calculate NPV, IRR and PI to answer the following questions.

Project

X

Y

Z

Initial cost

-$20,000

-$30,000

-$30,000

Year 1 CF

10,000

15,000

12,000

Year 2 CF

11,000

14,000

13,000

Year 3 CF

12,000

13,000

14,000

Year 4 CF

13,000

12,000

15,000

Required -

a. Which projects are acceptable? Why?

b. What is your decision if the projects are mutually exclusive?

Reference no: EM132757127

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