Question: Assume you are considering two mutually exclusive projects. The cash flows for project A and B are given below. Assume a discount rate of 9%.
- Assume you are considering two mutually exclusive projects. The cash flows for project A and B are given below. Assume a discount rate of 9%. Projects A & B can be renewed. Which project you would take? (10 points)
SEE NEXT PAGE FOR THE CASH FLOWS
| time | Project A | Project B |
| 0 | -$14,000,000.00 | -$18,750,000.00 |
| 1 | $1,000,000.00 | $3,000,000.00 |
| 2 | $2,000,000.00 | $3,000,000.00 |
| 3 | $6,000,000.00 | $3,000,000.00 |
| 4 | $6,000,000.00 | $3,000,000.00 |
| 5 | $5,000,000.00 | $3,000,000.00 |
| 6 | $3,000,000.00 | $5,000,000.00 |
| 7 | $0.00 | $3,000,000.00 |
| 8 | $0.00 | $5,000,000.00 |
| 9 | $0.00 | $5,000,000.00 |
| 10 | $0.00 | $2,000,000.00 |
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