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Problem 3(5 points): Consider the following two projects Year 0 Year Year 2 Year 3 Year4 Discount Project Cash Flow Cash Flow Cash Flow Cash
Problem 3(5 points): Consider the following two projects Year 0 Year Year 2 Year 3 Year4 Discount Project Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate 15 15 40 N/A 30 -100 50 60 -73 30 30 30 Write down your explanation for each question! You will receive zero point if you get the right answer without the correct explanation a) The NPV of project A is closest to: A) 12.0 B) 12.6 C) 15.0 D) 42.9 Explanation b) The NPV of project B is closest to A) 12.6 B) 23.3 C) 12.0 D) 15.0 Answer Explanation
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