Here are the cash-flow forecasts for two mutually exclusive projects:
Cash Flows (dollars) | |||||||
Year | Project A | Project B | |||||
0 | − | 120 | − | 120 | |||
1 | 50 | 69 | |||||
2 | 70 | 69 | |||||
3 | 90 | 69 | |||||
a-1. What is the NPV of each project if the opportunity cost of capital is 2%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
a-2. Which project would you choose?
b-1. What is the NPV of each project if the opportunity cost of capital is 14%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b-2. Which would you choose?
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