You will use the following information to answer three questions. You have been asked to analyze two
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You will use the following information to answer three questions.
You have been asked to analyze two proposed capital investments. The information related to each project is listed below.
| Project A | Project B | |
| Initial Cost | $250,000 | $350,000 |
| Cash Flows | ||
| Year 1 | $70,000 | $50,000 |
| Year 2 | $70,000 | $80,000 |
| Year 3 | $70,000 | $92,000 |
| Year 4 | $70,000 | $96,000 |
| Year 5 | $70,000 | $103,000 |
| Salvage Value | $20,000 | $35,000 |
Which project would you recommend? Why?
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