Question
Consider the following cash flows on two mutually exclusive projects: Year Project A Project B 0 $ 69,000 $ 84,000 1 49,000 48,000 2 44,000
| Consider the following cash flows on two mutually exclusive projects: |
| Year | Project A | Project B | ||
| 0 | $ | 69,000 | $ | 84,000 |
| 1 | 49,000 | 48,000 | ||
| 2 | 44,000 | 57,000 | ||
| 3 | 39,000 | 60,000 | ||
| 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 4 percent. |
| Calculate the NPV for each project. |
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Finance Of International Trade
Authors: Eric Bishop
1st Edition
0750659084, 978-0750659086
