consider the following two investment projects:

Year

Investment A end of year cash flows

Investment B end of year cash flows

2001

250000

100000

2002

410000

100000

2003

420000

100000

2004

600000

1000000

Both projects require an investment of 900000 at the end of 2000. The required rate of return for both projects is 10%.

what is the operating cash flow for project a?

Answer for part 1

what is the operating cash flow for b project?

Answer for part 2

what is the net present value a

Answer for part 3

what is the net present value for project b?

Answer for part 4

what is the profitability index for project A?

Answer for part 5

what is the profitability index for project B?