Draw a timeline for A and B

Chapter 9: Capital investment Decision Basics 279 ider another set of net cash flows: 93 Consider and Year Cash Flow ($) O 2,000 2,000 W N 1,500 2,500 4,000 u a. What b. What is the net present value of the stream if the opportunity cost of capital is 10 percent? What is the value of the stream at the end of year 5 if the cash flows are in- vested in an account that pays 10 percent annually? What cash flow today (time o), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.) 9.4 Better Health Inc. is evaluating two capital investments, each of which requires an up-front (time o) expenditure of $1.5 million. The projects are expected to produce the following net cash inflows: Year Project A ($) 500,000 1,000,000 2,000,000 Project B ($) 2,000,000 1,000,000 600,000 a. What is each project's IRR? 1. An if the annortunity cost of capital is 10 percent? 5