An investment firm is considering two projects to diversify its portfolio:Project X:•Initial Investment: $4,500,000•Yearly Returns:...
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An investment firm is considering two projects to diversify its portfolio: Project X: •Initial Investment: $4,500,000 •Yearly Returns: $1,200,000 for 6 years Project Y: •Initial Investment: $3,500,000 •Yearly Returns: $1,000,000 for 6 years Requirements: 1.Compute the NPV for both projects at a discount rate of 7%. 2.Calculate the IRR for each project. 3.Evaluate the payback period for both projects. 4.Recommend the better project based on NPV, IRR, and payback period.
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