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Based on your knowledge of investment decision rules, you are considering whether you should invest in Project B. Which investment decision rule could you apply?
Based on your knowledge of investment decision rules, you are considering whether you should invest in Project B. Which investment decision rule could you apply? Year 0 Year 1 Year 2 Year 3 Year 4 Project Cash Cash Flow Cash Flow Cash Flow Cash Flow Cost of capital Flow A -100 40 -50 60 N/A .15 B -73 30 30 30 30 .15 NPV IRR O NEITHER OBOTH You are offered a $16 million advance to write a book. The book will take you one year to write. You could have earned $12 million over the year (paid at the end of the year) if you do not write the book, but instead, give speeches. Assuming that your cost of capital is 10%, what is the NPV of your book deal? O $3.73 million O $5.09 million O $3.18 million O $2.00 million
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