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A firm is evaluating two projects

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A firm is evaluating two projects. The firm's cost of capital (appropriate discount rate) has been determined to be 9%, and the projects have the following initial investments and cash flows. Initial Investment Cash Flows 1 2 3 4

Project O P50,000 P20,000 P25,000 P15,000 P20,000

Project Y 248,000 P30,000 P35,000 240,000 P10,000

1. Determine the NPV of each project 

2. Which project should the company pursue? Why?

Option 1

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