Question
Your firm is subject to capital rationing and can only invest $60,000. You've estimated the following cash flows (in $) for two projects: Year Project
Your firm is subject to capital rationing and can only invest $60,000. You've estimated the following cash flows (in $) for two projects:
| Year | Project A | Project B |
| 0 | -54,000 | -54,000 |
| 1 | 10,000 | 30,000 |
| 2 | 20,000 | 20,000 |
| 3 | 30,000 | 10,000 |
| 4 | 40,000 | 0 |
The required return for both projects is 8%.
FIND THE FOLLOWING PART ONLY:
What is the NPV for project B?
* $1137.12 isn't correct
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Corporate Finance and Investment decisions and strategies
Authors: Richard Pike, Bill Neale, Philip Linsley
8th edition
1292064064, 978-1292064161, 1292064161, 978-1292064062
