An oil drilling company must choose between two mutually exclusive extraction projects, and each costs $12 million. Cash inflows include an annuity of $ 4million for the next 4 years for project A Cash inflows for project B consist of $3 million for 7 years WACC for both projects is 8% a) Estimate the cash flows and select or reject the project based on capital budgeting (NPV IRR and payback period )

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An oil drilling company must choose between two mutually exclusive extraction projects, and each costs $12 million. Cash inflows include an annuity of $ 4million for the next 4 years for project A Cash inflows for project B consist of $3 million for 7 years WACC for both projects is 8%
a) Estimate the cash flows and select or reject the project based on capital
budgeting (NPV IRR and payback period )

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