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A company is considering two mutually exclusive projects. Project A requires an initial investment of $1,000,000 and is expected to generate cash flows of $300,000 per year for 5 years. Project B requires an initial investment of $1,200,000 and is expected to generate cash flows of $350,000 per year for 5 years. The company's required rate of return is 10%. Which project should the company undertake based on the Net Present Value (NPV) method?
Sagot :
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