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In: Finance

2. Given the following expected cash flows for two projects, and an opportunity cost of capital...

2. Given the following expected cash flows for two projects, and an opportunity cost of capital of 10%, which project is better and why? (10 points)

            Expected Net Cash Flows

Year    Project A         Project B

0          -$10,000          -$10,000

1          $5000              $0

2          $5000              $0

3          $5000              $8,000

4          $5000              $2,000

3. Given the following expected cash flows for two projects, and an opportunity cost of capital of 8%, which project is better and why? (10 points)

            Expected Net Cash Flows

Year    Project A         Project B

0          -$1,000            -$1,000

1          $500                $50

2          $500                $300

3          $500                $400

4          $500                $2,000

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Expert Solution

jeff jeffy answered 2 years ago
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