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Consider only the cost schedule below of two comparable projects - Assume the cost schedule below is the only thing different between the two projects.
Consider only the cost schedule below of two comparable projects - Assume the cost schedule below is the only thing different between the two projects. - Which project is expected to have a riskier profile? - In other words, which will likely have more variability in the Operating Cash Flows through time?
A | B | |
Fixed Costs | $300,000 | $300,000 |
Variable Costs | $20,000 | $280,000 |
Total Costs | $320,000 | $580,000 |
Multiple Choice
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Project A
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Project B
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Neither, they both should be the same.
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