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Your company is considering two projects and has estimated the following cash flows: Year Project A Project B 0 -15,000 -20,000 1 10,000 10,000 2
Your company is considering two projects and has estimated the following cash flows:
Year | Project A | Project B |
0 | -15,000 | -20,000 |
1 | 10,000 | 10,000 |
2 | 10,000 | 15,000 |
part 1: If project B expands your manufacturing capacity by building a separate factory, what is the relevant cash flow for evaluating project B in year 2?
part 2: If project B replaces an existing factory (project A), what is the relevant cash flow for evaluating project B in year 2?
part 3: If project B replaces an existing factory (project A), what is the relevant cash flow for evaluating project B in year 0?
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