Question
The following are the cash flows of two projects: Year Project A Project B 0 $ (330 ) $ (330 ) 1 160 230 2
The following are the cash flows of two projects:
| Year | Project A | Project B | ||||
| 0 | $ | (330 | ) | $ | (330 | ) |
| 1 | 160 | 230 | ||||
| 2 | 160 | 230 | ||||
| 3 | 160 | 230 | ||||
| 4 | 160 | |||||
a. If the opportunity cost of capital is 12%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Which of these projects is worth pursuing?
****NOTE**** You are finding the NPV, NOT the Profitability index!
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Venture capital and the finance of innovation
Authors: Andrew Metrick
2nd Edition
9781118137888, 470454709, 1118137884, 978-0470454701
