Beacon company is considering two different mutually

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Reference no: EM13600076

Beacon company is considering two different, mutually exclusive capital expenditure proposals. project a will cost $400,000, has an expected useful life of 10 years, a salvage value of zero, and is expected to increase net annual cash flows by $70,000. project b will cost $280,000, has an expecteed useful life of 10 years, a salvage value of zero, and is expected to increase net annual cash flows by $50,000. a discount rate of 9% is appropriate for both projects. compute the net present value and profitability index of each project. which project should be accepted?

Reference no: EM13600076

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