Question: GHI Enterprises is assessing two exclusive projects. Project A requires an upfront investment of $10,000 and will yield returns of $4,000, $6,000, and $8,000 at
GHI Enterprises is assessing two exclusive projects. Project A requires an upfront investment of $10,000 and will yield returns of $4,000, $6,000, and $8,000 at the end of each year for three years. Project B requires an investment of $20,000 and will yield returns of $7,000, $9,000, and $11,000 at the end of each year for three years. The discount rate for both projects is 5%.
Requirements:- Calculate the NPV for Project A.
- Calculate the NPV for Project B.
- Advise which project should be chosen based on NPV.
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