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Investments Quick and Slow cost $800 each, are mutually exclusive, and have the following cash flows. The firm's cost of capital is 6 percent. Cash Inflows Year 1 $1,000 $275 275 275 275 a. According to the net present value method of capital budgeting, which investment(s) should the firm make? Use Appendix B and Appendix D to answer the question. Use a minus sign to enter negative values, if any. Round your answers to the nearest cent. NPV (Investment Quick): $ 144.40 NPV (Investment Slow): $ 152.90 The firm should make investment(s) Slow b. According to the internal rate of return method of capital budgeting, which investment(s) should the firm make? Use Appendix D to answer the question. Round your answers to the nearest whole number. IRR (Investment Quick): 25 % IRR (Investment Quick): IRR (Investment Slow): 14 The firm should make investment(s) Quick C. If Q is chosen, the $1,000 can be reinvested and earn 10 percent. Does this information alter your conclusions concerning investing in Q and S? To answer, assume that S's cash flows can be reinvested at its internal rate of return. Use the rounded internal rate of return from part b. Use Appendix A and Appendix C to answer the question. Round your answers to the nearest cent. Terminal value (Investment Quick): $ Terminal value (Investment Slow): $ The firm should make investment(s) Slow Would your answer be different if S's cash flows were reinvested at the cost of capital (6 percent)? Use Appendix C to answer the question. Round your answer to the nearest cent. Terminal value (Investment Slow): $ The firm should make investment(s) Quick

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