Question
A company with a cost of capital of 15% is choosing between the projects A and B. The cash flows for the corresponding projects are
A company with a cost of capital of 15% is choosing between the projects A and B. The cash flows for the corresponding projects are given below:
| year | A | B |
| 0 | -50,000 | -30,000 |
| 1 | 15,000 | 5,000 |
| 2 | 15,000 | 6,000 |
| 3 | 10,000 | 15,000 |
| 4 | 15,000 | 3,000 |
| 5 | 20,000 | 5,000 |
| 6 | 15,000 | 10,000 |
| 7 | 17,000 | 15,000 |
| 8 | 12,000 | 12,000 |
| 9 | 10,000 | 5,000 |
| 10 | 10,000 | 5,000 |
Based on the NPV criterion please decide which project is better?
Group of answer choices
A
B
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes
11th International Edition
1259094901, 9781259094903
