Question: A firm needs to docide between two mutually exclusive projects. Project Alpha requires an initial investment of $8,000 today and expected to generato cash flows
A firm needs to docide between two mutually exclusive projects. Project Alpha requires an initial investment of $8,000 today and expected to generato cash flows of $36,000 for the next 4 years, Project Bcla requires an initial investmxbt of $102,0XX) and is expected to gencriate cash flexws of $49,600) for the next years. The cost of capital is 5%. The projects can be repeated with no change in cash flows. What is the NPV of the project that would be selected based on the replacement cherin uralysis! O Project Beta; $218.575 Project Beta: $231.690 O Project Alpha: $218.575 O Project Alpha: $218.094 O Project Beta; $228 999
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
