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Problem 2.Sharp company has 15,000 to invest.The company is trying to decide between two alternative uses of the funds as follows: Project AProject B Investment

Problem 2.Sharp company has 15,000 to invest.The company is trying to decide between two alternative uses of the funds as follows:

Project AProject B

Investment required15,00015,000

Annual cash inflows4000-

Single cash inflow at the end of 10 years-60,000

Life of the project10 years10 years

Sharp company uses a 16% discount rate.

Which investment would you recommend that the company accept?Show all computations using NPV approach .

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