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Question
Consider the after-tax cash flows for Project S and Project L:| Project S | Project L | |
| Year 1 | $3000 | 0 |
| Year 2 | 0 | $3000 |
A rational person would prefer ________.
A) Project S because the money can be reinvested sooner
B) Project L because they can avoid taxes by receiving cash flows later
C) information about profits instead of cash flows
D) neither investment over the other
Answer
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