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Your company is considering two projects with the following details:Project IInitial Investment: $2,500,000Cash inflows of...

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Accounting

Your company is considering two projects with the following details:

Project I

  • Initial Investment: $2,500,000
  • Cash inflows of $700,000 per year for 5 years.

Project J

  • Initial Investment: $3,000,000
  • Cash inflows of $800,000 per year for 5 years.

a. Calculate the NPV at a discount rate of 8%. b. Determine the IRR. c. Analyze the profitability index. d. Which project would you recommend and why?

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