Question: ABC Corporation is evaluating two potential projects, Project A and Project B. Project A requires an initial investment of $500,000 and will generate cash inflows
ABC Corporation is evaluating two potential projects, Project A and Project B. Project A requires an initial investment of $500,000 and will generate cash inflows of $100,000 in Year 1, $150,000 in Year 2, $200,000 in Year 3, and $250,000 in Year 4. Project B requires an initial investment of $800,000 and will generate cash inflows of $200,000 in Year 1, $250,000 in Year 2, $300,000 in Year 3, and $400,000 in Year 4. The company's required rate of return is 12%. Which project should ABC Corporation invest in based on the net present value (NPV) method?
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