consider the following three investment projects, each with different cash flows in time . Your cost of capital is 5 percent

12 years of securities of equal Solution: Exercise 4: Net Present Value 12 Consider the following three investment projects, each with different cash flows in time. Your cost of capital is 5 percent Project 2020 2021 2022 2023 2024 2025 A -12000 4100 4500 2700 2300 1700 -11000/ 3200 3500 3900 4200 6300 -16000 3400 5300 6200 8400 9700 a) Calculate the net present values and intenal rates of return and index profit for each of the projects. b) if they are independent, should any of the projects be accepted? Why? c) Which of the projects should be accepted if they are mutually exclusive? d) What is the breakeven cost of capital? Solution