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How much value will the firm gain or lose

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Problem 1: Atlas Corp is considering two mutually exclusive projects. Both require initial investment of 10K at t =0. Project 1 has an expected life of 2 years with after tax cash inflows of 6K and 8k at the end of years 1 and 2, respectively. Proj 2 has an expected life of 4 years with after tax cash inflows of 4331 at the end of each of the next 4 years. Each project has a WAAC of 9.75%. Project 1 will be repeated once with no changes to cash flows. Proj 2 cannot be repeated. How much value will the firm gain or lose if Project 2 is chosen over Project 1?

Reference no: EM132965904

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