In the capital budgeting model in Figure 6.4, we supplied the NPV for each investment. Suppose instead that you are given only the streams of cash inflows from each investment shown in the file P06_01.xlsx. This file also shows the cash requirements and the budget. You can assume that (1) all cash outflows occur at the beginning of year 1, (2) all cash inflows occur at the ends of their respective years, and (3) the company uses a 10% discount rate for calculating its NPVs. Which investments should the company select?
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