Question
Two projects being considered are mutually exclusive and have the following cash flows: Year Project A Project B 0 -$50,000 -$50,000 1 15,000 0 2
- Two projects being considered are mutually exclusive and have the following cash flows:
| Year | Project A | Project B |
| 0 | -$50,000 | -$50,000 |
| 1 | 15,000 | 0 |
| 2 | 15,000 | 0 |
| 3 | 15,000 | 0 |
| 4 | 15,000 | 0 |
| 5 | 15,000 | 90,000 |
1) Calculate NPV of each project if the required rate of return on these projects is 8 percent.
2) which would be chosen and why?
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Business Finance
Authors: Ronald R. Pitfield
1st Edition
0852581513, 978-0852581513
