An investor is given the opportunity to invest in one of two projects: Project A costs $10

Question:

An investor is given the opportunity to invest in one of two projects:
Project A costs $10 000 now and pays back $15 000 at the end of four years.
Project B costs $15 000 now and pays back $25 000 at the end of five years.
The current interest rate is 9%.
By calculating the net present values, decide which, if either, of these projects is to be recommended.

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...

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