A company is considering two investment projects. Project A requires an initial investment of $500,000...
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A company is considering two investment projects. Project A requires an initial investment of $500,000 and is expected to generate annual cash flows of $150,000 for five years. Project B requires an initial investment of $700,000 and is expected to generate annual cash flows of $200,000 for seven years. Calculate the Net Present Value (NPV) for each project using a discount rate of 10%, and recommend which project the company should pursue.
A company has total assets of $5,000,000 and total liabilities of $3,000,000. Calculate the company's Debt-to-Asset ratio and Debt-to-Equity ratio. Interpret the results and discuss how these ratios reflect the company's financial risk and leverage.
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