Consider two projects with the following cash flow: year project A project...
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Accounting
Consider two projects with the following cash flow:
year
project A
project b
1
800
960
2
820
900
3
900
820
4
960
900
Indicate whether each statement is TRUE or FALSE:
(T/F) At 10% per year, both Projects have cash flow equivalent to an annuity that gives 880 per year.
(T/F) Given a positive interest rate, the future value of Project B is higher than that of Project A.
(T/F) If the payback period method rejects Project A, it would also reject Project B.
(T/F) If the payback period method accepts Project B, it would also accept Project A.
(T/F) Given a positive interest rate, the future value of Project B is higher than Project A but the present value of Project A is higher than Project B.
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