Question: 3. The cash flow streams for two projects A & B are as presented in the Table below: 0 1 2 3 4 5 6

3. The cash flow streams for two projects A & B are as presented in the Table below:

0 1 2 3 4 5 6 7 8
A -1000 700 600 500 300 200
B -1500 750 650 550 450 300 250 150 100

a) What is the NPV for each project if the time value of money costs 10%?

  1. Is the PIR of Project A greater than Project B?
  2. Would you rank project A higher than B, if you have a budget constraint and the projects are non-mutually exclusive? Why?
  3. What does it mean for a project to be non-mutually exclusive? Give an example
  4. What is the VIR for Project A
  5. What is the ROI for Project B
  6. Is the POB of A shorter than POB of B?
  7. Graphically explain the difference between NPV profile and CNCF profile
  8. List and define a key economic indicator you can derive from CNCF & NPV profiles
  9. True or false, there is no difference between ROI and PI of Project A? Explain!

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