Question: Financial Model - (8 marks) Inatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative.
Financial Model - (8 marks) Inatech is contemplating two different projects and decides to perform a financial analysis to determine which is more financially lucrative. Project A and B have the cash flows as shown and Inatech uses a required rate of return of 10% and an inflation rate of 4%. Compute the net present value and the payback in years for both projects and offer advice as to the best course of action. Year A B 0 -$250,000 -$400,000 1 $75,000 $125,000 2 $155,000 $230,000 3 $200,000 $288,000 4 $175,000 $265,000 5 $160,000 $225,000
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