Question: Zeta Constructions is considering two mutually exclusive projects. The initial investment and annual cash flows are as follows: Year Cash Flows (Project E) Cash Flows

Zeta Constructions is considering two mutually exclusive projects. The initial investment and annual cash flows are as follows:

Year

Cash Flows (Project E)

Cash Flows (Project F)

0

-150,000

-150,000

1

40,000

50,000

2

50,000

50,000

3

60,000

50,000

4

60,000

60,000

a. Calculate the NPV for both projects using a discount rate of 7%. b. Recommend which project Zeta Constructions should undertake.

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