Question
The following are the cash flows of two independent projects: Year Project A Project B 0 $(340) $(340) 1 170 240 2 170 240 3
The following are the cash flows of two independent projects:
Year Project A Project B
0 $(340) $(340)
1 170 240
2 170 240
3 170 240
4 170
a.If the opportunity cost of capital is 10%, calculate the NPV for both projects.(Do not round intermediate calculations. Round your answers to 2 decimal places.)
Project NPV
project A ?
project B ?
b.Which of these projects is worth pursuing?
- Project A
- Project B
- Both
- Neither
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
