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Tnatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative. Project A and B have
Tnatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative. Project A and B have cash flows as shown. Inatech uses a required rate of return of 10% and an inflation rate of 4%. Compute the discounted payback in years and the net present value for both projects, and then offer advice as to the best course of action. 80 pts
Year | A | B |
0 | -$100,000 | -$400,000 |
1 | $20,000 | $75,000 |
2 | $50,000 | $100,000 |
3 | $50,000 | $150,000 |
4 | $25,000 | $150,000 |
5 | $500,000 | $750,000 |
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