Clement plc is evaluating three investment projects, whose expected cash flows are given in Table 6.4. Calculate the net present value for each project if Clement’s cost of capital is 10 per cent and suggest which of the two projects should be selected. 

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Table 6.4 Three investment projects with different cash-flow profiles to illustrate calculating net present value Clement plc: cash flows of proposed investment projects Project B Project A (000) Project C (000) (000) Period 0 1 2 234 3 567 (5,000) 1,100 1,100 1,100 1,100 1,100 1,100 1,100 (5,000) 800 900 1,200 1,400 1,600 1,300 1,100 (5,000) 2,000 2,000 2,000 100 100 100 100