Question
The cash flow projections for Project A and B are given in the table below. Assuming a discount rate of 10% and 12%. Calculate Net
The cash flow projections for Project "A" and "B" are given in the table below. Assuming a discount rate of 10% and 12%. Calculate Net Profit, Payback Period, Return on Investment (ROI) for each project. Also, calculate the NPV for the two projects for each discount rate. Which project is better in the case of 10% discount rate and which is better in terms of 12% discount rate. Justify your answer. Y e a r D Project Project A B 0 -8000 1 4000 2 4000 3 2000 4 1000 5 500 6 500 7 4000 -8000 1000 2000 4000 3000 9000 -5000 6000 Discount Factor 10% 1 0.9091 0.8264 0.7513 0.683 0.6209 0.5645 0.5264 Discount Factor 12% 1 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.5006 DCF Project A (10 %) DCF Project A (12 %) DCF Project B (10 %) -8000 -8000 -8000 3636.4 3571.6 909.1 3305.6 3188.8 1652.8 1502.6 1423.6 30005.2 683 635.5 2049 310.45 283.7 558.1 282.25 253.3 -2822.5 1720.3 1356.5 2381.7 DCF Project B (12 %) -8000 892.9 1594.4 2847.2 1906.5 5106.6 -2533 1814.6
The cash flow projections for Project "A" and "B" are given in the table below. Assuming a discount rate of 10% and 12%. Calculate Net Profit, Payback Period, Return on Investment (ROI) for each project. Also, calculate the NPV for the two projects for each discount rate. Which project is better in the case of 10% discount rate and which is better in terms of 12% discount rate. Justify your
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