Question
You are analyzing the following two projects, A and B. The required return is 10%. Year Project A Cash flow Project B Cash flow 0
You are analyzing the following two projects, A and B. The required return is 10%.
| Year | Project A Cash flow | Project B Cash flow |
| 0 | -$75,000 | -$75,000 |
| 1 | $24,800 | $22,000 |
| 2 | $29,500 | $27,500 |
| 3 | $45,300 | $51,300 |
Which project(s) should be accepted if the two projects are independent? Explain why. If you use the NPV (or IRR) rule, provide the NPVs (or IRRs of the two projects.
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Empirical Finance For Finance And Banking
Authors: Robert Sollis
1st Edition
047051289X, 978-0470512890
