Question: 5. You are considering the following two mutually exclusive projects. Should you accept or reject these projects based on net present value (NPV) analysis? Assume
5.
You are considering the following two mutually exclusive projects. Should you accept or reject these projects based on net present value (NPV) analysis? Assume the discount rate for both projects is 7 percent. Why or why not?
| Year | Project Alpha | Project Beta |
| 0 | -$320,000 | -$655,000 |
| 1 | $292,000 | $396,000 |
| 2 | $165,000 | $319,000 |
| 3 | $107,000 | $204,000 |
Group of answer choices
Both; because Both projects have the positive NPV.
None; because both have the negative NPV.
Project Alpha; because the NPV of the project Alpha is greater than the NPV of the project Beta.
Project Beta; because the NPV of the project Beta is greater than the NPV of the project Alpha.
You cannot make this decision based on net present value analysis.
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