Question
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0 $ 56,000 $ 71,000 1 36,000 35,000 2 31,000
| Consider the following cash flows on two mutually exclusive projects: |
| Year | Project A | Project B | ||
| 0 | $ | 56,000 | $ | 71,000 |
| 1 | 36,000 | 35,000 | ||
| 2 | 31,000 | 44,000 | ||
| 3 | 26,000 | 47,000 | ||
| | ||||
| The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 3 percent. |
| Calculate the NPV for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| NPV | |
| Project A | $ |
| Project B | $ |
| | |
| Which project should you choose? | ||||
|
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ISO IEC 27001 Lead Auditor Mastering ISMS Audit Techniques
Authors: Dr Tamuka Maziriri
1st Edition
107903160X, 978-1079031607
