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Given the following projects A and B which are mutually exclusive and their respective cash flows, which project
Given the following projects A and B which are mutually exclusive and their respective cash flows, which project
would you choose if
i) The rate of return is 8 percent [3 marks]
ii) The rate of return is 11 percent [3 marks]
iii) How is the decision affected by the rate of return? What should the project manager do [2 marks]
Year Project A Project B
0 -$240,000 -$198,000
1 $ 0 $110,800
2 $ 0 $ 82,500
3 $325,000 $ 45,000
