Big Shot Market is considering two investment projects: Project AProject B Initial Cost250,000200,000 Number of Periods55 Yearly Net Cash Flow75,00060,000 Cost of Capital (WACC)5%5% 21 The NPV of Project A = a.75,820 b.74,710 c.75,690 d.76,210 e.None of the above

22The NPV of Project B = a.59,769 b.58,869 c.60,379 d.60,549 e.None of the above

23Should Big Shot invest? a.No, because both NPVs are positive b.No, because both NPVs are negative c.Yes, because both NPVs are negative d.Yes, because both NPVs are positive

24Based on the NPV which project should they choose? a.Project A. Project A has the highest NPV b.Project A. Project A has the lowest NPV c.Project B. Project B has the highest NPV d.Project B has the lowest NPV