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Which of the two projects the firm should accept

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A firm must choose from one of two proposed projects presented below. The firm's cost of capital is 11.25%. Using the NPV method, explain which of the two projects the firm should accept, with an initial investment of Initial Investment = $185,000

Year

Project A

Project B

PVA

PVB

1

$50,000

$15,000

 

 

2

$66,000

$17,000

 

 

3

$45,000

$25,000

 

 

4

$35,000

$75,000

 

 

5

$25,000

$70,000

 

 

6

$20,000

$45,000

 

 

Reference no: EM13969936

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