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You are considering two independent projects both of which have been assigned a discount rate of 15% percent. Based on the project NPV, what is
You are considering two independent projects both of which have been assigned a discount rate of 15% percent. Based on the project NPV, what is your recommendation concerning these projects?
Project A | Project B | |||
Year | Cash Flow | Year | Cash Flow | |
0 | -$40,000 | 0 | -$51,173 | |
1 | $35,000 | 1 | $18,400 | |
2 | $27,000 | 2 | $14,750 |
You should accept both projects.
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You should reject both projects.
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You should accept project B and reject project A.
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You should accept project A and reject project B.
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You should accept project A and be indifferent to project B.
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