Question
Which project should D&A should pick? Project A: t 0 1 2 3 4 5 6 7 8 9 10 CF 10,000 -55,000 155,000 125,000
Which project should D&A should pick?
Project A:
| t | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| CF |
| 10,000 | -55,000 | 155,000 | 125,000 | 119,000 | 113,500 | 201,500 | 123,000 | -119,000 | 54,000 |
Project B:
| t | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| CF |
| 95,000 | 112,000 | 155,000 | -125,000 | 119,000 | -153,000 | 255,000 | -113,000 | 139,000 | 39,000 |
The cost of capital (discount rate) for both projects is 7.89% /year. Based on the given information, please calculate the present value of the cash flow for both projects. Which project has a higher present value? Please show all the calculations
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Forecasting And Predictive Analytics With Forecast X
Authors: Barry Keating, J. Holton Wilson, John Solutions Inc.
7th International Edition
1260085236, 9781260085235
