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Year Project A Project B 0 200,000) (200,000) 1 80,000 100,000 2. 80,000 100,000 3 80,000 100,000 80,000 3. If the opportunity cost of capital
Year Project A Project B 0 200,000) (200,000) 1 80,000 100,000 2. 80,000 100,000 3 80,000 100,000 80,000 3. If the opportunity cost of capital is 11%, which of these projects is worth pursuing? Find the NPV of both projects. 4. Suppose that you can only choose one of these projects. Which is more favourable to the firm given that the discount rate remains at 11%? (Which has the higher NPV) 5. Which project would you choose if the opportunity cost of capital were 16%? (NPV/IRR) 6. What is the payback period for each project
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