Question: i need the solution in typing. 1. Projects A and B have the following expected net cash flows: Project A Project B Year Cash Flow
1. Projects A and B have the following expected net cash flows: Project A Project B Year Cash Flow Cash Flow 0 -$500,000 -$500,000 1 250,000 350,000 2 250,000 350,000 3 250,000 300,000 4 200,000 200,000 5 150,000 Both the projects are of the same company, Bit Corporation. The most recently paid dividend was $2 and it is growing at 5% for the infinite period of time. Moreover, the stock is selling for $45. Assume you are a finance manager of the company. a. Calculate the pay back period for both projects. (4) b. Calculate the NPV of both projects. (6) c. Which project should the company choose and why? (2)
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