Question: Ace Inc. is evaluating two mutually exclusive projects: Project A and Project B. The initial cash outflow is $50,000 for each project. Project A generates

  1. Ace Inc. is evaluating two mutually exclusive projects:

  3. Project A and Project B. 

  5. The initial cash outflow is $50,000 for each project. 

  7. Project A generates cash inflows of $15,625 at the end of each of the next five years. 

  9. Project B generates a cash inflow of $99,500 at the end of the fifth year. Ace Inc.'s required rate of return is 10 percent. 

  11. In which project Ace Inc. should invest and why?

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