NPV Competing Projects

Net Cash flows: Year Proiect A Equi Project B Equi 90,000 $ 100,000 $ 60,0009 50,000$ 50,000 80,000 60,000 40,000 Life is 4 years and each equipment has an investment of $200,000 Discount rate is 10% Assume no salvage on equipment A. What is the NPV of each project? Project Equipment A Year Cash flow Discount factor NPV 0 2 3 4 Total NPV Project Equipment B Cash flow Discount factor Year 0 NPV 2 3 4 Total NPV B. Which project would you choose and why C. ls there either project that should not be considered at all? Tables Present Value of $1 Periods 2 3 4 5 5% 0.95238 0.90703 0.86384 0.8227 0.78353 10% 0.90909 0.82645 0.75132 0.68301 0.62092 Present Value of an Annuit 5% 0.95238 1.85941 2.72325 3.54595 4.32948 10% 0.90909 1.73554 2.48385 3.16986 3.79079 Periods 2 5