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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 402 Weeks Ago, 1 Day Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Risk Adjusted WACC: Adage Mining Inc. uses a cost of capital of 12 percent to evaluate average risk project and it adds or subtracts 2 percent to adjust for risk. Currently the firm has two mutually exclusive projects under consideration. Both the projects have an initial cost of $200,000 and will last four years. Project A, risker than average, will produce an annual cash flow of $71,104 at the end of each year. Project B, of less than average risk will produce cash flows of $146,410 at the end of Year 3 and 4 only. Which investment should firm chose and Why?
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