Which investment should harold coop purchase

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Reference no: EM133344877

Question: Harold Coop is considering investing in either ABC or ZYX. Both investments ABC and ZYX cost $17,000. In order to make the purchase, Harold Coop needs to obtain a loan from the bank at an interest rate of 8%. The bank is only willing to offer Harold Coop $17,000. The following table outlines the expected net cash flows from each investment.

Year	ABC	ZYX
1	$800	$8,000
2	$1,400	$7,000
3	$3,300	$3,800
4	$6,400	$1,100
5	$8,800	$800
Total	$20,700	$20,700

Based on the NPV method, which investment should Harold Coop purchase?

Reference no: EM133344877

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