Management must choose between two attractive projects because of limited resources. Each project is assumed...
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Finance
Management must choose between two attractive projects because of limited resources. Each project is assumed to have a 10-year life and a 12% discount rate. Expected cash flows are as follows:
Project A Project B Initial outflow $40,000 $90,000 Annual inflows $15,000 $29,000
Using the Profitability Index method, which project will management choose?
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