The CFO is evaluating two investment projects, each of which will cost $10,000,000 and has a life of 4 years. There are sufficient funds, however, to finance only one of these opportunities.

Evaluate each of these projects using the net present value method and 10% as cost of capital.

Are both projects acceptable? Which one is more preferable?

The CFO is evaluating two investment projects, each of which will cost $10,000,000 and has a life of 4 years. There are sufficient funds, however, to finance only one of these opportunities. The cost accountant has prepared a cash flow report for each project as follows: Project A Project B Year (*000s) (*000s) 1 3,600 4,000 2 3,900 4.000 3 4,500 4,000 4 5,000 4,000 Evaluate each of these projects using the net present value method and 10% as cost of capital. Are both projects acceptable? Which one is more preferable? (8 marks)