Project H requires an initial investment of $100,00 that produces annual cash flows of $45,000 per year for each of the next 3 years. Project T also requires an initial investment of $100,000 and produces cash flows of $30,000 in year 1, $40,000 in year 2, and $70,000 in year 3. If the discount rate is 10% and the projects are mutually exclusive which project will be chosen and why?

Answer rating: 100% (QA)

To determine which project is more favorablewe can use two common capital budgeting techniques 1 Net Present Value NPV This method calculates the pres... View the full answer