Question
You're the CFO of a company that has to choose one of the below mutually exclusive projects. You've estimated the company's WACC as 7%. Which
You're the CFO of a company that has to choose one of the below mutually exclusive projects. You've estimated the company's WACC as 7%. Which should you choose?
| Year | Project A | Project B |
| 0 | -$10,000 | -$10,000 |
| 1 | $5,000 | $4,000 |
| 2 | $4,000 | $3,000 |
| 3 | $3,000 | $10,000 |
a)Both projects both have positive NPV.
b)Project A
c)Project B
d)Neither project both have negative NPV.
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Finance Directors Handbook
Authors: Glynis D Morris, Sonia McKay, Andrea Oates
5th Edition
1566768691, 978-1566768696
