Question
(Mutually exclusive projects and NPV)You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A
(Mutually exclusive projects and NPV)You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
| Year | Project A Cash Flow | Project B Cash Flow |
|---|---|---|
| 0 | $(110,000) | $(110,000) |
| 1 | 31,000 | 0 |
| 2 | 31,000 | 0 |
| 3 | 31,000 | 0 |
| 4 | 31,000 | 0 |
| 5 | 31,000 | 240,000 |
If the appropriate discount rate on these projects is 12 percent, which would be chosen and why?
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Market Regulations And Finance
Authors: Ratan Khasnabis, Indrani Chakraborty
2014th Edition
8132217942, 978-8132217947
