Question
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 -$78,000 -$28,800
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects:
| Year | Cash Flow (I) | Cash Flow (II) |
| 0 | -$78,000 | -$28,800 |
| 1 | 28,300 | 9,600 |
| 2 | 34,800 | 17,400 |
| 3 | 43,700 | 15,600 |
Required return is 11 percent:
A) What is the NPV for Project (II)?
B) Should they accept or reject the projects? One or the other? Both?
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Venture Capital And The Finance Of Innovation
Authors: Andrew Metrick
1st Edition
0470074280, 9780470074282
