COMPARING TWO PROJECTS UNSING NET PRESENT VALUE (NPV) Year o Year 1 Year 2 Year 3 Year 5 Year 6 Total Interest rate 15% ($700,000) $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 1 2 3 Question 1: 4 5 Project A 6 Required 7 Outflow 8 Inflow 9 Net Inflow 10 NPV 11 12 13 Project B Required 15 Outflow 16 Inflow 17 Net Inflow 18 NPV ($ 700,000) $225,000 1,125,000.00 $225,000 $425,000 $54,234.90 15% ($400,000) $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 ($400,000) $550,000 $150,000 ($31.262.94) Save OH Calculation Questions (2) - Protected View O Search Home Insert Page Layout Formulas Data Review View Help ROTECTED VIEW Be careful--files from the Internet can contain viruses. Unless you need to edit it's safer to stay in Protected View UBSCRIPTION EXPIRED Most of the features of Excel have been disabled Reactivate Enable Ed X fo B D E G H ($400,000) A utflow flow et Inflow PV $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 ($400,000) $550,000 $150,000 ($31,262.94) Based on the information above, identify which project (Project A or B) should be accepted? Explain why. By changing the figures in the excel template (above), assume the interest rate for Project A fell to 13%, and Cash Questions: outflow (The initial investment) was $950,000, Cash Inflows was $350,000 per annum for the 6 years, and Net inflows was also $250,000. For Project B, assume interest rate also fell to 13% ut Cash outflow, Inflow and Net Inflows remain the same. What is the new NPV for each of the project? Would you receommend that any of these