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 |
- Calculate the NPV for each project.
- Which project would you accept according to the NPV?
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