Question
. You have been asked by Segal Ltd to consider the following cash flows for 2 mutually exclusive investments: Year Investment A Investment B 0
. You have been asked by Segal Ltd to consider the following cash flows for 2 mutually exclusive investments:
| Year | Investment A | Investment B |
| 0 | -$10,000 | -$10,000 |
| 1 | $4,000 | $6,000 |
| 2 | $6,000 | $6,000 |
| 3 | $9,000 | $6,000 |
Suppose the required rate of return is 6% p.a. Which of these investments do you prefer based on NPV?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th Edition
1260772381, 978-1260772388
