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Project H requires an initial investment of $100,000 and produces annual cash flows of $50,000, $40,000, and $30,000. Project T requires an initial investment of $100,000 and the produces annual cash flows of $30,000, $40,000, and $50,000. The projects are mutually exclusive. The company accepts projects with payback periods of 3 years or less.
Comparative Advantage
The ability of a country, company, or individual to produce a good or service at a lower opportunity cost than competitors.
Proximity
The state of being close or near in space, time, or relationship.
Natural Resources
Naturally occurring materials such as minerals, water, and fertile land that can be used for economic gain.
International Organization
An entity formed by sovereign states or civil societies to work on common areas of interest such as peace, security, and development on a global scale.
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