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UF company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable.
UF company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and are not repeatable.
WACC: 7.75%
| Year | 0 | 1 | 2 | 3 | 4 |
| CFs | ($1,050) | $700 | $625 | ||
| CFL | ($1,050) | $370 | $370 | $360 | $360 |
1) Calculate NPV of projects S and L, NPVS & NPVL
| NPVs | |
| NPVL | |
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