A company decided to choose between two projects based on the shorter discounted payback period at...

A company decided to choose between two projects based on the shorter discounted payback period at an interest rate of i=10%. Both projects will have a service life of 6 years. Project A needs an initial investment of $20,000 and will generate a net cash flow in years 1 through 6 of $6,500. Project B needs $17,500 to invest initially, and will have a variable net cash flow as follows: $1,500 in year 1, $3,000 in year 2, $4,500 in year 3, $5,000 in year 4, and $7,000 each in years 5 and 6.Which project will the company choose and what is its discounted payback period?

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Rahul Sunny answered 1 week ago

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