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Chapter 10, Problem 10.3WUE

Axis Corp. is considering investment in the best of two mutually exclusive projects. Project Kelvin involves an overhaul of the existing system; it will cost $52,500 and generate cash inflows of $24,500 per year for the next 3 years. Project Thompson involves replacement of the existing system; it will cost $265,000 and generate cash inflows of $61 ,000 per year for 6 years. Using an 8.75% cost of capital, calculate each project’s NPV, and make a recommendation based on your findings.

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Chapter 10 Solutions

Principles of Managerial Finance, Student Value Edition Plus MyLab Finance with Pearson eText - Access Card Package (15th Edition) (Pearson Series in Finance)

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