Question
You have been assigned the task of evaluating two mutually exclusive projects with the following projected free cash flows: Year Project A cash flow Project
You have been assigned the task of evaluating two mutually exclusive projects with the following projected free cash flows:
| Year | Project A cash flow | Project B cash flow |
| 0 | -$100,000 | -$100,000 |
| 1 | 33,000 | 0 |
| 2 | 33,000 | 0 |
| 3 | 33,000 | 0 |
| 4 | 33,000 | 0 |
| 5 | 33,000 | 220,000 |
If the appropriate discount rate on these projects is 10%, which project would be chosen and why?
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Technical Analysis Of Stock Trends
Authors: Robert D. Edwards, John Magee
5th Edition
0910944008, 978-0910944007
