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Two government projects have the following benefit profiles. Compare the net present values (NPV) of Project A and Project 8 in different scenarios of
Two government projects have the following benefit profiles. Compare the net present values (NPV) of Project A and Project 8 in different scenarios of 3% and 10% discount rates. (1) Fill the table that shows the NPV of each year and totals (see the examples in Slidell 32-33) (2) Evaluate which project is better (more benefit than cost). Initial Investment Cost Benefits, Year 1 Benefits, Year 2 Benefits, Year 3 Benefits, Year 4 Please use the attached table Project A 100,000 0 0 80,000 80,000 Project B 100,000 40,000 40,000 40,000 40,000 Bras Two government projects have the following benefit profiles. Compare the net present values (NPV) of Project A and Project B in different scenarios of discount rates of 3% and 10%. (1) Fill the table that shows NPV of each year and totals (see the examples in Slide 32-33) (2) Evaluate which project is better (more benefit than cost). Initial Investment Cost Benefits, Year 1 Benefits, Year 2 Benefits, Year 3 Benefits, Year 4 Cost Benefit Yri Yr2 Yr3 Yr4 Total B-C Evaluation Nominal Value A B 100,000 100,000 0 0 40,000 80,000 40,000 80,000 40,000 160,000 160,000 60,000 60,000 40,000 Same Project A Project A 100,000 0 0 80,000 80,000 Discount 3% Project B 100,000 40,000 40,000 40,000 40,000 Net Present Value (by Discount) Projection Project B Project A Discount 10% Project B
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