a) What is the NPV of each project? Which projects should Xia undertake, and how much cash should it retain?
b) What is the total value of Xia’s assets today?
c) What cash flows will the investors in Xia receive? Based on these cash flows, what is the value of Xia today?
d) Suppose Xia pays any unused cash to investors today, rather than investing it. What are the total cash flows to the investors in this case? What is the value of Xia now?
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