SECTION C: SK1: 1 x 4 Marks + 2 x 3 Marks = 10 Marks] Evaluate the following projects, using the net present value criteria. Assume a cost of capital of 8%. Initial Cash Outflow Year 1 Cash flow Year 2 Cash flow Year 3 Cash flow Project A $160,000 69,000 71,000 85,000 Project B $160,000 95,000 80,000 50,000 1. Which project would you accept according to the NPV criterion? Why? [SK1: 4 Marks) 2. Both projects have in total $225.000 of cash inflows and the same initial cu Why don't both projects have the same NPV? [SK1: 2 Marks MID TERM SPRING 2019-2020 and the same initial cash outflow. 3. If the cost of capital increased to 20%, what impact would this have on your decision? [SK1: 2 Marks] 4. Why does a change in the cost of capital have an impact on the NPV? [SK1: 2 Marks]