Question
Your company is considering two projects with the following cash flows: Project A Project B Time Cash Flow Cash Flow 0 -1000000 -1000000 1 200000
Your company is considering two projects with the following cash flows:
| Project A | Project B | |
| Time | Cash Flow | Cash Flow |
| 0 | -1000000 | -1000000 |
| 1 | 200000 | 500000 |
| 2 | 300000 | 400000 |
| 3 | 400000 | 300000 |
| 4 | 500000 | 100000 |
1. What is the NPV for project A assuming a discount rate of 8%
2. What is the NPV for project B assuming a discount rate of 8%
3. If these projects are mutually exclusive, and a discount rate of 8% is used, identify which project(s) you should accept and the reason for your decision.
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Microfinance Handbook An Institutional And Financial Perspective
Authors: Joanna Ledgerwood
1st Edition
0821343068, 978-0821343067
