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Project H requires an initial investment of $100,000 and the produces annual cas

ID: 2687548 • Letter: P

Question

Project H requires an initial investment of $100,000 and the produces annual cash flows of $50,000, $40,000, and $30,000. Project T requires an initial investment of $100,000 and the produces annual cash flows of $30,000, $40,000, and $50,000. If the required rate of return is greater than 0% and the projects are mutually exclusive: A. H will always be preferable to T. B. H and T are equaly attractive. C. T will always be preferable to H. D. The project rankings will change with different discount rates.

Explanation / Answer

A. H will always be preferable to T