Question
Kodark is evaluating investing in three equally risky projects A, B and C. The firm has a 12% cost of capital and cash flows are
Kodark is evaluating investing in three equally risky projects A, B and C.
The firm has a 12% cost of capital and cash flows are provided in the table.
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Calculate NPV to determine the best project
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Calculate ANPV to determine the best project
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Which machine would you recommend for the firm? show your work , explain your reasoning
| Project A | Project B | Project C | |
| Initial investment | $92,000 | $65,000 | $100,500 |
| Year | Cash inflows | ||
| 1 | $12,000 | $10,000 | $30,000 |
| 2 | $12,000 | $20,000 | $30,000 |
| 3 | $12,000 | $30,000 | $30,000 |
| 4 | $12,000 | $40,000 | $30,000 |
| 5 | $12,000 | $30,000 | |
| 6 | $12,000 |
|
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The Theory And Practice Of Investment Management
Authors: Frank J Fabozzi, Harry M Markowitz
2nd Edition
0470929901, 9780470929902
