a)
To determine: The range of annual
b)
To construct: The table of NPVs for each project and indicate the range of NPVs for each project.
Introduction:
NPV refers to the discounted value of the future cash flows at present. The company should accept the project even if NPV is positive or greater than zero. If there are two mutually exclusive projects, then the company has to select the project that has a higher net present value.
c)
To discuss: Whether the range of annual cash inflows and range of NPVs provide consistent views of the two projects.
d)
To discuss: The Person X recommendation of the project.
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