Question: Calculate the NPVs for the following projects, using a WACC of 14%. Cash Flow Project Gamma Project Delta Year 0 -$30,000 -$75,000 Year 1 $15,000
Calculate the NPVs for the following projects, using a WACC of 14%.
Cash Flow | Project Gamma | Project Delta |
Year 0 | -$30,000 | -$75,000 |
Year 1 | $15,000 | $25,000 |
Year 2 | $20,000 | $30,000 |
Year 3 | $15,000 | $25,000 |
Year 4 | $12,000 | $20,000 |
- Calculate the NPV for both projects.
- Determine the IRR for both projects.
- Evaluate the payback period for each project.
- Choose the project based on the highest NPV and justify the decision.
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