You are considering investing in one of two different projects. Two investment options are available as follows:
Fantastic news! We've Found the answer you've been seeking!
Question:
You are considering investing in one of two different projects. Two investment options are available as follows:
| Projekt A, million $ | Projekt B, million $ | |
| (Basic Investment) | 1200 | 75 |
| Net cash flow, year 1 | 100 | 22 |
| Year 2 | 250 | 30 |
| Year 3 | 400 | 41 |
| Year 4 | 740 | 47 |
| Year 5 | 850 | 48 |
| Residual value | 0 | 0 |
| Tax rate | No tax | No tax |
The discount rate is 16%
a) What is the net present value of the investments?
b) Which project should you invest in and why?
Expert Answer:
Related Book For 
Posted Date:
