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You've estimated the following cash flows (in $) for two projects: Year Project A Project B 0 -5,400 -8,100 1 1,325 1,325 2 2,148 2,148
You've estimated the following cash flows (in $) for two projects:
Year | Project A | Project B |
0 | -5,400 | -8,100 |
1 | 1,325 | 1,325 |
2 | 2,148 | 2,148 |
3 | 3,909 | 7,777 |
The required return for both projects is 8%.
Part 1. What is the NPV for project A?
Part 2. What is the NPV for project B?
Which project seems better according to the NPV method? Project A or Project B?
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