Your firm is considering two investment projects with the following patterns of expected future net after-tax cash flows:

Year

Project A

Project B

1

$1 million

$5 million

2

$4 million

$1 million

3

$3 million

$3 million

4

$2 million

$2 million

5

$5 million

$4 million

The appropriate cost of capital for both projects is 10%. If both projects require an initial outlay of $10 million, which is the better project? Show all of your work.

Chapter 6 1. Your firm is considering two investment projects with the following patterns of expected future net after-tax cash flows: Vea Project A $1 million $4 million $3 million $2 million $5 million Project B $5 million $1 million $3 million $2 million $4 million The appropriate cost of capital for both projects is 10%. If both projects require an initial outlay of $10 million, which is the better project? Show all of your work