Question
Your boss hands you the following information for a pair of mutually exclusive projects and asks for your recommendation. What should you do? Cash Flows
Your boss hands you the following information for a pair of mutually exclusive projects and asks for your recommendation. What should you do?
| Cash Flows | ||||||
|---|---|---|---|---|---|---|
| Project | Cost of Capital | IRR | Year 0 | Year 1 | Year 2 | Year 3 |
| A | 12% | 34% | $10,000 | $8000 | $5000 | $3000 |
| B | 12% | 30% | $10,000 | $2800 | $7000 | $8000 |
1.The NPV of project A is?
2. The NPV of project B is?
3. Using the NPV rule, which project should be selected?
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Fundamentals Of Financial Planning
Authors: Michael A Dalton, Joseph Gillice
3rd Edition
1936602091, 9781936602094
