Question
PROJECT A PROJECT B TIME 0 -10,000 -10,000 TIME 1 5,000 4,000 TIME 2 4,000 3,000 TIME 3 3,000 10,000 Ifa profit-oriented firm ischoosing one
PROJECT A PROJECT B
TIME 0 -10,000 -10,000
TIME 1 5,000 4,000
TIME 2 4,000 3,000
TIME 3 3,000 10,000
Ifa profit-oriented firm ischoosing one of the above mutually exclusive projects (Project A or Project B), given a discount rate of 8%, which shouldit choose?
a. Both projects - both have positive NPV.
b. Neither project - both have negative NPV.
c. Project A
d.Project B
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
