Question
Your division is considering two projects with the following cash flows and a WACC of 14.00%. Year 0 1 2 3 Project Red -$200,000 $60,000
Your division is considering two projects with the following cash flows and a WACC of 14.00%.
| Year | 0 | 1 | 2 | 3 |
| Project Red | -$200,000 | $60,000 | $78,000 | $120,000 |
| Project Blue | -$200,000 | $100,000 | $100,000 | $50,000 |
a. Assuming the projects are independent, which one(s) would you recommend?
b. If the projects are mutually exclusive, which would you recommend?
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World Finance Since 1914
Authors: Paul Einzig
1st Edition
0415539471, 978-0415539470
