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Consider the following two investments, each of which has an original cost of $12.000. Net...

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Accounting

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Consider the following two investments, each of which has an original cost of $12.000. Net revenues ($) Year Investment A Investment B DOWN 3,000 3.000 3,000 3,000 3,000 3,000 1,000 1.000 3,000 3,000 4,000 7.000 Here is a table of discount factors (e.g. Present Value of $1.00) for different interest rates: Year 4% 5% 6% 1 0 .9620 .952 0.943 2 0 .9250 .907 0.890 3 0 .8890 .864 0.840 4 0.8550 .8230 .792 5 0 .8221 0.784 0.747 6 0 .790 0.746 0.705 1) Calculate the payback period for investments A and B. Which is preferred by this criterion? 2) Calculate the simple rate of return for investments A and B. Which is preferred by this criterion? 3) Calculate the Net Present Value of A and B using a 4% discount factor. Which is preferred by this criterion? 4) Calculate the Net Present Value of A and B using a 6% discount factor. Which is preferred by this criterion

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