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3 marksInvestment Appraisal

CAPE Management of Business Unit 1 · 2006 · Paper 2 · Question 5(c)

Compare the implication of the NPV of project B and project C.

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  1. 5(a)Compute the Net Present Value (NPV) of each project using a discount rate of 11%.[18 marks]
  2. 5(b)Based on the NPV, determine which project the company should invest in and justify your recommendation.[4 marks]

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