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Cash flows for two mutually exclusive projects

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Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, which of the following statements is true?

YearProject AProject B0-300,000-300,0001150,00070,0002150,00070,000380,000120,000480,000120,0005 120,0006 60,000

Group of answer choices

Neither project should be accepted.

Project A should be accepted because it has the highest NPV.

Project B should be accepted because it has the highest EAA.

Project B should be accepted because it has the highest NPV.

Project A should be accepted because it has the highest EAA.

Reference no: EM132495012

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