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The G. Wolfe Corporation is examining two capital-budgeting projects with 5-year lives.

The G. Wolfe Corporation is examining two capital-budgeting projects with 5-year lives. The first, project A, is a replacement project; the second, project B, is a project unrelated to current operations. The G. Wolfe Corporation uses the risk-adjusted discount rate method and groups projects according to purpose, and then uses a required rate of return or discount rate that has been pre-assigned to that purpose or risk class. The expected cash flows for these projects are given here:

This question was asked on Apr 27, 2010.

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