Question
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive...
(Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
|
Year |
Project A Cash Flow |
Project B Cash Flow |
|
|
0 |
$(90,000) |
$(90,000) |
|
|
1 |
32,000 |
0 |
|
|
2 |
32,000 |
0 |
|
|
3 |
32,000 |
0 |
|
|
4 |
32,000 |
0 |
|
|
5 |
32,000 |
240,000 |
If the appropriate discount rate on these projects is 9 percent, which would be chosen and why?
The NPV of Project A is $ _______. (Round to the nearest cent.)
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