Exercise 3_ch3_no6 (NPV and IRR): You are offered the following three projects: 2345 A Project A...

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Exercise 3_ch3_no6 (NPV and IRR): You are offered the following three projects: 2345 A Project A B C B C Cash flow today ($) Cash flow next year -20 40 30 -15 7 10 Assume that the cost of capital (interest rate) is 12% a.) b.) c.) d.) Find the NPV of each project. If you can choose only one project, which one should you choose? How would your answer to question b change if the cost of capital were 5%? What is the range of cost of capital in which you will invest in project A? Exercise 3_ch3_no6 (NPV and IRR): You are offered the following three projects: 2345 A Project A B C B C Cash flow today ($) Cash flow next year -20 40 30 -15 7 10 Assume that the cost of capital (interest rate) is 12% a.) b.) c.) d.) Find the NPV of each project. If you can choose only one project, which one should you choose? How would your answer to question b change if the cost of capital were 5%? What is the range of cost of capital in which you will invest in project A?

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a Computation of NPV Project Cash Flows A B C Cash flow ... View the full answer