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You work for the 3T company, which expects to earn at least 14 percent on its investments. You have to choose between two similar projects.

You work for the 3T company, which expects to earn at least 14 percent on its investments. You have to choose between two similar projects. Below is the cash flow information for each project. Calculate the NPV of each project. (Use the NPV function in Excel to solve this problem.) Which of the two projects would you fund if the decision is based only on financial information and you could only choose one of the projects?

Omega Alpha
Year Inflow Outflow Netflow Year Inflow Outflow Netflow
Y0 0 222,000 (222,000 ) Y0 0 214,000 (214,000 )
Y1 0 200,000 (200,000 ) Y1 0 180,000 (180,000 )
Y2 150,000 0 150,000 Y2 150,000 0 150,000
Y3 220,000 30,000 190,000 Y3 220,000 30,000 190,000
Y4 206,000 0 206,000 Y4 182,000 0 182,000
Y5 205,000 33,000 172,000 Y5 205,000 41,000 164,000
Y6 197,000 0 197,000 Y6 197,000 0 197,000
Y7 100,000 30,000 70,000 Y7 100,000 30,000 70,000
Total 1,078,000 515,000 563,000 Total 1,054,000 495,000 559,000

The NPV for OMEGA??

The NPV for ALPHA??

The better project is???

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