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Which of the two mutually exclusive projects should be accepted under net present value ? Cash flows (in $) of the projects are as follows
Which of the two mutually exclusive projects should be accepted under net present value ? Cash flows (in $) of the projects are as follows and subsequent cash flows are discounted at 10% which is the cost of capital of both the companies:
| Description | Project A | Project B |
Year 0 | Initial investments | -100,000 | -100,000 |
Year 1-5 | Present value of cash inflows | 1,12,000 | 115,000 |
Select one:
a. Project B
b. Both Project A & Project B
c. Project A
d. None of Project A & Project B
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