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Roger Johnson has been asked to evaluate two dif- ferent product development projects. After some investigation, he determines that they have the following costs: Original
Roger Johnson has been asked to evaluate two dif- ferent product development projects. After some investigation, he determines that they have the following costs: Original cost Labor cost per year Other costs per year Increased revenues per year Project A $257,500 $23,700 $1,275 $75,000 Project B $285,200 $21,900 $1,585 $80,000 Each project has a 5-year life span and requires a 12 percent return. a. What is the net present value of Project A? b. What is the net present value of Project B? c. Which project should Roger recommend
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