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4. You work for the ST company, which expects to earn at least 18 percent on its investments. You have to choose between two similar
4. You work for the ST company, which expects to earn at least 18 percent on its investments. You have to choose between two similar projects. The following chart shows the cash information for each project. Which of the two projects would you fund if the decision were based only on nancial information? Why? Omega Year Inflowr Y0 0 Y1 0 Y2 $ 150.000 Y3 220.000 Y4 215,000 Y5 205,000 Y6 107,000 Y7 100.000 Total 1,037 .000 Outow $225,000 100,000 0 30,000 0 30,000 0 30,000 505,000 Metow 225.000 \"190.000 150.000 190.000 215.000 \"5.000 197.000 ?0.000 582.000 Alpha Year Y0 Y1 Y2 Y3 Y4 Y5 Y5 Y? Total Inow 0 $ 50,000 150.000 250.000 250,000 200,000 100.000 120.000 1,200.000 Outow $300,000 100,000 0 50,000 0 50,000 0 30,000 530,000 Netflow 300.000 50,000 1 50.000 200.000 250.000 1 50.000 130.000 90.000 610.000
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