1) From the NPV worksheet, would you Accept or Reject Project A?

2)From the NPV worksheet, what is your reason to Accept or Reject Project A?

A. NPV is negative

B. NPV is positive

3)

From the NPV worksheet, What is the NPV of Project A?

A) -$29,287

B ) $32,311

C ) -$18,175

D ) $325,000

Exhibit 2.3B Example Comparing Two Projects Using NPV Year 1 Year 2 Year 3 Year o Year 4 Year 5 Total 15% $ Project A Discount Required Outflows Inflows Net Inflows Project NPV Project B Discount Required Outflows Inflows Net Inflows Project NPV (750,000) $ (750,000) $ 215,000 $ 215,000 $ 215,000 $ 215,000 $ 215,000 $ 1,075,000 S 215,000 $ 215,000 $ 215,000 $ 215,000 $ 215,000 $ 325,000 Project A NPV: ENPV(Discount Required, Series of Net Inflows) + Year 0 Outflows Year o Year 1 Year 2 Year 3 Year 4 Year 5 Total 15% $ (250,000) $ (250,000) $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 400,000 S 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 150,000 Project B NPV: =NPV(Discount Required Series of Net Inflows) + Year O Outflows Explanation Accept/Reject Project A: Project B: Accept/Reject: Accept if Project NPV is positive. Reject otherwise