Caladonia Corp is considering two investments with one-year lives. The more expensive of the two is the

Caladonia Corp is considering two investments with one-year lives. The more expensive of the two is the better and will produce more savings. Assume these projects are mutually exclusive and that the required rate of return is 10%. Given the following after-tax net cash flows:

Year Project A Project B

0 -$195,000 $-$1,200,000

1 $240,000 $1,650,000

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