GHI Corporation has two potential projects, Project Eagle and Project Hawk, with initial investments of...
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Accounting
GHI Corporation has two potential projects, Project Eagle and Project Hawk, with initial investments of JPY 120,000 each. The estimated after-tax cash flows are:
Year
Cash Flows (Project Eagle)
Cash Flows (Project Hawk)
Initial Investment
(120,000)
(120,000)
1
40,000
35,000
2
35,000
40,000
3
30,000
35,000
4
25,000
30,000
a. Calculate the Net Present Value (NPV) for both projects using a discount rate of 5%.
b. Based on the NPV, which project is more viable?
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