Question
Assume you have 3 projects with the following cash flows, and the projects are independent. The cost of capital is 3% and the required rate
Assume you have 3 projects with the following cash flows, and the projects are independent. The cost of capital is 3% and the required rate of return is 20%.
| Year | 0 | 1 | 2 | 3 | 4 |
| Project 1 | -250 | 100 | 100 | 150 | 220 |
| Project 2 | -825 | 0 | 0 | 7000 | -6500 |
| Project 3 | -20 | 40 | 60 | 80 | -245 |
Which project/projects should you choose ? Show your work.
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Finance Theory And Practice
Authors: Anne Marie Ward
2nd Edition
1907214259, 978-1907214257
