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Dwight Donovan, the president of Donovan Enterprises is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Problem A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of four years and no salvage value. Project B supports a training program that will improve the skill of employees operating the current equipment. Initial cash expenditures for project A are $400,000 and for Project B are $160,000. The annual expected cash inflow are $126,000 for Project A and $52,800 for Project B. Both investment are expected to provide cash flow benefits for the next four years. Donovan Enterprises’ desired rate of return is 8 percent.