26

Intro

Your company is considering two projects and has estimated the following cash flows:

Year	Project A	Project B
0	-15,000	-20,000
1	10,000	10,000
2	10,000	15,000

Attempt 1/1

Part 1

If project B expands your manufacturing capacity by building a separate factory, what is the relevant cash flow for evaluating project B in year 2?

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Attempt 1/1

Part 2

If project B replaces an existing factory (project A), what is the relevant cash flow for evaluating project B in year 2?

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Attempt 1/1

Part 3

If project B replaces an existing factory (project A), what is the relevant cash flow for evaluating project B in year 0?