Question: Costcutters Corp. is considering 3 projects, A, B, and C. The cash flows for each project are shown in the table below. If the cost
Costcutters Corp. is considering 3 projects, A, B, and C. The cash flows for each project are shown in the table below. If the cost of capital is 16% and these projects are mutually exclusive projects, which project should the company invest in? (Hint: use the NPV investment criteria)
| Year | Project A: CF | Project B: CF | Project C: CF |
| 0 | -40,000 | -40,000 | -40,000 |
| 1 | 13,000 | 7,000 | 19,000 |
| 2 | 13,000 | 10,000 | 16,000 |
| 3 | 13,000 | 13,000 | 13,000 |
| 4 | 13,000 | 16,000 | 10,000 |
| 5 | 13,000 | 19,000 | 7,000 |
| A | ||
| B | ||
| C | ||
| A and C |
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