Question: ABC Inc. is considering two mutually exclusive investment projects, each of which requires an up-front expenditure of $2,288,000.00. You estimate that the investments will produce

 ABC Inc. is considering two mutually exclusive investment projects, each of

ABC Inc. is considering two mutually exclusive investment projects, each of which requires an up-front expenditure of $2,288,000.00. You estimate that the investments will produce the following net cash flows: Year 1 2 3 Project A $4,670,000 11,090,000 21,020,000 Project B $19,760,000 10,480,000 6,500,000 Which project should ABC Inc. choose , assuming the cost of capital is 11.00%? Choose Project A becasue NPVA > NPVg by $3,028,779.39. Choose Project B becasue NPVB > NPVA by $2,408,127.87. Choose Project A becasue NPVA > NPVg by $2,010,910.9. Choose Project B becasue NPVB > NPVA by $2,482,606.05. Choose Project A becasue NPVA > NPVg by $2,805,344.84

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