Question: Evaluate the following projects, using the Net Present Value (NPV). Assume a cost of capital of 6%. Project A Project B Initial Cash Outflow $200,000

Evaluate the following projects, using the Net Present Value (NPV). Assume a cost of capital of 6%.

Project A

Project B

Initial Cash Outflow

$200,000

$160,000

Year 1 Cash flow

69,000

80,000

Year 2 Cash flow

71,000

80,000

Year 3 Cash flow

85,000

50,000
  1. Calculate the NPV for each project.
  2. Which project would you accept according to the NPV?

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