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Find required rate of return and reinvestment rate

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Lexus Berhad is considering two mutually exclusive projects, A and B. Project A costs RM95,000 and is expected to generate RM65,000 in year one and RM75,000 in year two. Project B costs RM120,000 and is expected to generate RM64,000 in year one, RM67,000 in year two, RM56,000 in year three, and RM45,000 in year four. The firm's required rate of return and reinvestment rate for these projects is 7.25%.

Reference no: EM133001176

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