LMN Ltd. is considering two projects, A and B. The cash flows are as follows:YearProject...
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Accounting
LMN Ltd. is considering two projects, A and B. The cash flows are as follows:
Year
Project A (USD)
Project B (USD)
0
(500,000)
(500,000)
1
100,000
150,000
2
150,000
200,000
3
200,000
250,000
4
250,000
300,000
5
300,000
350,000
Requirements: a. Compute the payback period for both projects. b. Calculate the NPV for both projects at a discount rate of 6%. c. Based on NPV, which project should LMN Ltd. invest in?
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