For the given cash flows below assume the cash flow is the


For the given cash flows below, assume the cash flow is the same in the next 2 years. Compute the NPV for each project, and compute the incremental IRR. Compare and explain why NPV always gives the correct decision.

Project     Initial Investment     Year 1 Cash Flow  

A             500,000              125,000

B             500,000              120,000

Question: Compare and contrast the uses of break-even analysis and sensitivity analysis in evaluating project risk.

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Financial Management: For the given cash flows below assume the cash flow is the
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