Company BW has the following two investment opportunities (A and B). a) Which project is better,...

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Company BW has the following two investment opportunities (A and B). a) Which project is better, according to NPV ? b) Which project is better, according to Modified IRR? Let's not to consider the difference in the duration of these projects Net Cash Flows End of Year 1 2 3 4 Project A -8,000 500 11,500 Project B -6,000 2,500 3 500 3,500 3,000 Company BW has the following two investment opportunities (A and B). a) Which project is better, according to NPV ? b) Which project is better, according to Modified IRR? Let's not to consider the difference in the duration of these projects Net Cash Flows End of Year 1 2 3 4 Project A -8,000 500 11,500 Project B -6,000 2,500 3 500 3,500 3,000

Answer rating: 100% (QA)

a NPV is calculated as follows NPV Initial investment PV of future cash flows The PV of future cash ... View the full answer