Assume that: 11 . the interest rate (r) is r = 8%. . Year 1 costs/ revenues occur at the end of the present period, i.e. in arrears (so discounting is required), Year 2 costs/revenues occur at the end of Year 2, etc For each of the four scenarios, calculate: 1. the total Present Value of revenues for Firm A. 2. the total Present Value of costs for Firm A. 3. the Net Present Value (NPV) of profit for Firm A.Part of this question was set for a previous exam. Hint: refer to Excel tool #6d on Blackboard to assist with this question. Suppose two firms (A and B) are considering investing in new technology which is specific to a joint project lasting up to three years. The costs and benefits of investment depend upon the decisions of both firms. Firm A's costs/revenues ($000s) Firm A invests Firm A invests Firm B invests Firm B doesn't invest Year 1 2 3 Year 1 2 3 Revenues 20 60 60 Revenues 20 20 0 Costs -50 0 0 Costs -50 -10 0 Firm A doesn't invest Firm A doesn't invest Firm B invests Firm B doesn't invest Year 1 2 3 Year 1 2 3 Revenues 40 20 C Revenues 10 10 Costs 0 -5 Costs 0 0