A business is comparing Project A and Project B, two unrelated projects.
Project A involves spending £240,000 on a new machine that will generate increased cash flow by £60,000 every year for the following five years.

Project B entails spending £350,000 on a new machine that will improve
the next two years' cash flow will be £50,000 each, and the following three will be £100,000 for each of the next four years.

The devices will be disposed of for £10,000 for each project (not included in the at the conclusion of the project (cashflows above).

Calculate the NPV for each project using a discount rate of 8%

Answer rating: 100% (QA)

Net Present value Present value of cash flow Initial Investment Answer Net ... View the full answer