I am retaking this course b/c I did not do well the first time. I have submitted the question, as well as my answer below. Can you please verify that the answer is correct? If it is incorrect, can you please tell me where I went wrong? Thank you.

Good old XYZorp (they're back!)? is considering two mutually exclusive projects, A & B in order to expand their product line.? After letting the cost accountants out of their cages, it was determined that project A's initial investment must be $42,400, while project B will cost $60,000.

Project A has projected cash inflows of $25,000 per year for three years.? Project B's inflows are more variable:? $10,000 in year 1; $30,000 in year 2; and $40,000 in its final year.

The firm's cost of capital is 12%.? YES - this IS important!

Using NPV analysis, if the NPV for project? B = + $ 1,320 (yes, I did the computation for you!), which project do you prefer?? In other words - which project will have the higher NPV.

Selected Answer:	NPV = 25,000/(1+.12)^1 + 25,000/(1+.12)^2 + 25,000/(1 + .12)^3 = 22,321.42857 + 19.929.84694 + 17,794.5062 = 60,045.78171 60,046 - 42,400 (initial investment) = $17,646 NPV for Project A is $17,646 Project A will have the higher NPV as compared to Project B, so the XYZcorp should pick Project A.
Response Feedback:	[None Given]