Decision-Making with Relevant Costs at Google

• Values:

• Project A Investment: $2,000,000
• Project A Expected Annual Cash Inflows: $500,000
• Project B Investment: $1,500,000
• Project B Expected Annual Cash Inflows: $400,000
• Requirements:

0. Calculate the net present value (NPV) for both Project A and Project B.
1. Determine which project Google should choose based on NPV.
2. Discuss the concept of relevant costs in decision-making.
3. Recommend criteria for effective project selection at Google.