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2. The company has two investment projects, which have the following characteristics given below: End of Year Project A Project B 0 -$1.600 -$1.600 1
2. The company has two investment projects, which have the following characteristics given below: End of Year Project A Project B 0 -$1.600 -$1.600 1 $1.000 $400 2 $750 $600 3 $400 $1.150 NOTE: PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS. a) Compute the Fisher's rate between the Project A and Project B. (10p) b) Which project is the best for the firm if the discount rate %22? (5p) c) If the firm value $9.800 before Project A, how much will it be after the Project? (10p) (Assumption: discount rate for Project A is 7%)
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