Question: P-2. Good old XYZorp (they're back) is considering two mutually exclusive projects, A & B in order to expand their product line. After letting the
P-2. Good old XYZorp (they're back) is considering two mutually exclusive projects, A & B in order to expand their product line. After letting the cost accountants out of their project A's initial investment must be $42,400, while project B will cost $60,000. Project A has projected cash inflows of $25,000 per year for three years. Project B's infilows are more variable $10,000 in year 1; $30,000 in year 2; and $40,000 in its finall year You have determined the following: the Prime is 7%, LIBOR is 6%, the firm's cost of capital is lx Using NPV analysis, If the NPV for project 8-+S 1,320 (yes, I ddi the computation for youD, which project do you prefer
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