Question: Abcom is considering building either a one-storey (Project A) or five-storey (Project B) block of offices on a prime site. The following information is available:

Abcom is considering building either a one-storey (Project A) or five-storey (Project B) block of offices on a prime site. The following information is available: Initial Investment Outlay Net Inflow at Year End Project A -9,500 11,500 Project B -15,000 18,000 Assuming the discount rate to be 10% per annum, which project should Abcom undertake? Use the NPV and IRR techniques for the evaluation.

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