Question: 6. Evaluate th e following projects using the net present value criteria. Assume a cost of capital of 10%. Project A nitial Cash Outflow Year
6. Evaluate th e following projects using the net present value criteria. Assume a cost of capital of 10%. Project A nitial Cash Outflow Year 1 Cash flow Year 2 Cash flow Year 3 Cash flow Project B -$250,000-$250,000 $ 25,000 $150,000 $125,000 100,000 $175,000 75, 0oo a hatare ehe APY% for he ricts ad har ruel b. If you can only do one project, which would you accept according to the NPV criterion? c. If you have access to $$00,000 in capital, which would you accept according to the NPV criterion? Both projects have in total $325,000 of cash inflows and the same initial cash outflow. Why don't both projects have the same NPV? If the cost of capital increased to 15%, what impact would this have on your decision? Why does a change in the cost of capital have an impact on the NPV? e. f
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