Question: Consider the following cash flows on two mutually exclusive projects Year Project AProject B 0-$68,000-$83,000 1 48,00047,000 243,00056,000 338,00059,000 The cash flows of Project A

Consider the following cash flows on two mutually exclusive projects

Year Project AProject B

0-$68,000-$83,000

1 48,00047,000

243,00056,000

338,00059,000

The cash flows of Project A are expressed in real terms while those of Project B are

expressed in in nominal terms. The appropriate nominal discount rate is 11 percent

and the inflation rate is 5 percent.

Calculate the NPV for each project.

NPV

Project A$

ProjectB $

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