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Project J has a cost of $22,000 and is expected to produce benefits (cash flows) of $7,000 per year for 4 years (1-3; 5). Project K costs $70,000 and is expected to produce cash flows of $20,000 per year for 4 years (1-3; 5), in year 4, each project has a cash inflow of $3,000 for Project J and $2,000 for Project K respectively. Calculate the two projects’ NPVs, IRRs, and PIs assuming a cost of capital of 10%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which project should actually be selected?

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