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An engineering company normally expects a rate of return of 10 % on investments. Two...

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Finance

An engineering company normally expects a rate of return of 10 % on investments. Two projects are available but only one can be chosen. Project A requires an immediate investment of $7300. In return, a revenue payment of $4400 will be received in four years and a payment of $11000 in seven years. Project B requires an investment of $2800 now and another $2500 in three years. In return, revenue payments will be received in the amount of $1250 per year for seven years. Which project is preferable?

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