Question: Question 4 (25 points): Two mutually exclusive investments have the following cash flows and both need to have a minimum rate of return is 16%

Question 4 (25 points): Two mutually exclusive investments have the following

Question 4 (25 points): Two mutually exclusive investments have the following cash flows and both need to have a minimum rate of return is 16% for the first five years and 20% for the last five years. Which project would you recommend for funding using NPV analysis. Project A: CF C=-6,000 I=1000 I=1100 =1200 I=1300 I=1300 L=$3,600 Year 0 1 2 3 4 10 Project B: CF C=-6,500 I=1350 1=1350 I=1350 I=1350 I=1350 L=$9,500 Year 0 1 2 3 4 10 ... C: Cost, I: Income, L: Salvage Value

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