This Question: 1 pt Consider the following two projects: Year 0 Year 1 Year 2 Year...

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Answer 1

Answer #1

Initial cash flows for Project Beta = $80

Present value of cash inflows = [$25/(1.13)¹] + [$25/(1.13)²] + [$25/(1.13)³] + [$25/(1.13)⁴] + [$25/(1.13)⁵] + [$25/(1.13)⁶] + [$25/(1.13)⁷]

Present value of cash inflows = $25 * 4.42261 = $110.57 or approximately $111

Present value of cash inflows = $111

Net Present value = $111 - $80

Net Present value = $31

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Answer 2

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