Question
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0 $ 68,000 $ 83,000 1 48,000 47,000 2 43,000
| Consider the following cash flows on two mutually exclusive projects: |
| Year | Project A | Project B | ||
| 0 | $ | 68,000 | $ | 83,000 |
| 1 | 48,000 | 47,000 | ||
| 2 | 43,000 | 56,000 | ||
| 3 | 38,000 | 59,000 | ||
| 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 11 percent and the inflation rate is 5 percent. |
| Calculate the NPV for each project. |
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Health Care Finance And The Mechanics Of Insurance And Reimbursement
Authors: Michael K. Harrington
1st Edition
1284026124, 9781284026122
