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Susans Lawnmowing has two projects to choose from a manufacturing building renovation or a rebuild of the manufacturing building. The cash flows of the two
Susans Lawnmowing has two projects to choose from a manufacturing building renovation or a rebuild of the manufacturing building. The cash flows of the two project opportunities are represented in this table:
Time | 0 | 1 | 2 | 3 | 4 |
Rebuild | -1500 | 300 | 600 | 400 | 300 |
Renovation | -2500 | 600 | 800 | 900 | 600 |
The company believes the relevant cost of capital is 5%. Which project should the company select and how much room for error is there for this cost of capital? Please illustrate with a basic graph/plot (only the key data points should be labelled).
using formula plz
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