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ABC Corporation is evaluating two different investment projects, Project M and Project N. The cash...

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Accounting

  1. ABC Corporation is evaluating two different investment projects, Project M and Project N. The cash flows are as follows:

Year

Project M (USD)

Project N (USD)

0

(500,000)

(500,000)

1

100,000

50,000

2

150,000

100,000

3

200,000

150,000

4

300,000

250,000

5

350,000

300,000

Requirements: a. Calculate the payback period for both projects. b. Determine the NPV for both projects assuming a discount rate of 8%. c. Which project should ABC Corporation invest in based on NPV and why?

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