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Alan is charged with determining which small projects should be funded. Along with this assignment, he...

Alan is charged with determining which small projects should be funded. Along with this assignment, he has been granted the use of $15,000 for a maximum of two years. He is considering three projects. Project A costs $7,500 and has cash flows of $4,000 a year for Years 1 to 3. Project B costs $8,000 and has cash flows of $3,000, $4,000, and $3,000 for Years 1 to 3, respectively. Project C costs $2,000 and has a cash inflow of $2,500 in Year 2. What decisions should he make regarding these projects if he assigns them a mandatory discount rate of 8.5 percent? Explain why.

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jeff jeffy answered 1 year ago
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