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 | $(102,000) | $(102,000) | |
| 1 | 32,000 | 0 | |
| 2 | 32,000 | 0 | |
| 3 | 32,000 | 0 | |
| 4 | 32,000 | 0 | |
| 5 | 32,000 | 200,000 |
If the appropriate discount rate on these projects is
8
percent, which would be chosen and why?
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Contemporary Economics An Applications Approach
Authors: Robert Carbaugh
8th Edition
1138652199, 978-1138652194
