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Suppose Johnston. has two mutually exclusive investment projects to choose from: Investment A and Investment B. Investment A has an initial investment (year 0) of
Suppose Johnston. has two mutually exclusive investment projects to choose from: Investment A and Investment B. Investment A has an initial investment (year 0) of $2 million and future inflows (in millions) of: $0.5 in year 1, and $2 in year 2. Investment B has an initial investment (year 0) of $2 million and future inflows (in millions) of: $4.5 in year 1, and $0.3 in year 2. The discount rate of both of these investments is 2%. If Johnston. can afford either investment, then they should:
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