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Chapter 6 6) You are a financial manager and your firm is considering the following two projects: Project A: t 0 1 2 3 4
Chapter 6 6) You are a financial manager and your firm is considering the following two projects: Project A: t 0 1 2 3 4 5 6 7 8 9 10 TO 10,00 0 55,00 155,00 125,00 0 0 0 119,00 113,50 201,50 123,00 0 0 0 0 119,00 54,00 0 0 Project B: to 1 2 3 4 5 6 7 8 9 10 - To 95,00 | 112,00 155,00 0 0 0 125,00 119,00 0 0 153,00 255,00 0 0 113,00 139,00 39,00 0 0 0 The cost of capital (discount rate) for both projects is 6.05% per year. Based on the given information, please calculate present value of the cash flow for both projects. Which project has higher present value? Please show all the calculations by which you came up with the final answer. (8 Points)
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