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Compute the discount rates for each project

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Question - Consider two mutually exclusive projects: X and Y. Initial cash outlay for both projects are $10,000. Cash inflow from project X for years 1 to 4 are $6,500, $3,000, $3,000 and $1,000 respectively. Project Y has annual cash inflow of $3,500 for years 1 to 4. Compute the discount rates for each project for which their respective NPV is zero. Based on this discount rate, which project should be accepted?

Reference no: EM133047699

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