Question: Consider the following cash flows on two mutually exclusive projects. Year 0 Project A -$67,000 34,000 37,000 23.000 Project B $74,000 34,000 45,000 29.000 2

Consider the following cash flows on two mutually exclusive projects. Year

Consider the following cash flows on two mutually exclusive projects. Year 0 Project A -$67,000 34,000 37,000 23.000 Project B $74,000 34,000 45,000 29.000 2 The cash flows of project A are expressed in real terms while those of project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 5 percent. Which project should you choose

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