Three mutually exclusive projects that you are considering have the same project period of 4 years. Using
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Question:
Three mutually exclusive projects that you are considering have the same project period of 4 years. Using the cash flows presented below, select the best project on the basis of NPV analysis if a two-year continuously compounded interest rate is 20%. (Hint: Need to find an effective rate per year first)
Please show how to work using excel. Thanks!
| Project A | Project B | Project C | |
| Initial cost | -$1,200,000.00 | -$1,500,000.00 | -$2,000,000.00 |
| AOC ($/year) | -$400,000.00 | -$250,000.00 | -$100,000.00 |
| Salvage value | $0.00 | $0.00 | $0.00 |
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