Question: Project A and Project B are two mutually exclusive projects. Project A has a lifetime of 15 years while project B has a lifetime of

Project A and Project B are two mutually exclusive projects. Project A has a lifetime of 15 years while project B has a lifetime of 3 years. The current average cost of capital is 3.5%. Using NPV method of capital budgeting, analyse what impact an increase to a high cost of capital has on each of these projects. (300 words)

[10 marks]

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