Question: Garage, Inc, has identified the following two mutually exclusive projects: Year Project Free Cash Fows (dollars in thousands) Project Project A Project B Initial investment
Garage, Inc, has identified the following two mutually exclusive projects: Year Project Free Cash Fows (dollars in thousands) Project Project A Project B Initial investment ($30,000) ($30,000) 199,000 $15,000 259,000 $9,000 359,000 $7,500 459,000 $3,000 If the required return is 7 percent, what is the NPV for each of these projects? Which project will the company choose it it applies the NPV decision rule? Explain your answer? Which project will the company choose if the payback period rule is applied? Explain your
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