Question: Consider the following two projects. Project Alpha with a discount rate of 15% has an initial cash outflow of $79 then following cash flows of
Consider the following two projects. Project Alpha with a discount rate of 15% has an initial cash outflow of $79 then following cash flows of $20 in year 1, $25 in year 2, $30 in year 3, $35 in year 4 and $40 in year 5. Project Beta with a discount rate of 16% has an initial outflow of $80 and cash flows of $25 each year for the next 7 years. The net present value (NPV) for project alpha
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