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A developer has 20 acres of real estate for a project She has two projects to consider for the land. She can only select one

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A developer has 20 acres of real estate for a project She has two projects to consider for the land. She can only select one project as both require all 20 acres. The developer is looking at a 10-year time frame for this investment. The expected cash Mows from the projects are described below PROJECT A: Apartments with retail space. The project will require 51 184.967 00 invested today, and an additional $800,000.00 in one year. The project will generate a cash flow of $250,000.00 in the second year Cash Mows will grow at 5.00% per year for the remainder of the 10-year project. The developer believes she can sell the property in year 10 for a cash flow of $3,000,000.00 PROJECT B: Upscale neighborhood The project will require 5856,189.00 invested today, and will generate $200,000.00 in the first year . The cash flows from the project will DECLINE by 500% per year for the remainder of the 10-year project The developer will not have any rights to the property at the end of the 10th year as the neighborhood will be fully developed The developer wants a 15.00% return on his investments What is the NPV of project By Submit

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