Question
The following are the cash flows of two projects: Year Project A Project B 0 -$240 -$240 1 120 140 2 120 140 3 120
The following are the cash flows of two projects:
| Year | Project A | Project B |
|---|---|---|
| 0 | -$240 | -$240 |
| 1 | 120 | 140 |
| 2 | 120 | 140 |
| 3 | 120 | 140 |
| 4 | 120 |
a. Calculate the NPV for both projects if the discount rate is 12%.
b. Suppose that you can choose only one of these projects. Which would you choose? Project A, Project B or Neither.
Step by Step Solution
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Step: 1
ANSWER AND EXPLANATION NPA of project A 240 1201012 1201...
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System Dynamics
Authors: William Palm III
3rd edition
73398063, 978-0073398068
