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A company is considering two investment projects: Project A and Project B. Project A requires an initial investment of $50,000 and is expected to generate
- A company is considering two investment projects: Project A and Project B.
- Project A requires an initial investment of $50,000 and is expected to generate cash flows of $20,000 per year for the next 5 years.
- Project B requires an initial investment of $70,000 and is expected to generate cash flows of $25,000 per year for the next 4 years.
- Calculate the net present value (NPV) and profitability index (PI) for each project assuming a discount rate of 10%.
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