Question: Given information on the following two projects, which one would you recommend and why? (10 marks for each Project (ASB) (8) - 2 points for

 Given information on the following two projects, which one would you

Given information on the following two projects, which one would you recommend and why? (10 marks for each Project (ASB) (8) - 2 points for correct NPV I point for correct ROI I point for correct payback year 1 point for recommending correct project I point for correct reason) Project A will run for 4 years, including I development year. It has expected costs as follows: Year 1 Year 3 Year 4 $5,000 $25,000 $1,000 $100 Project A has expected benefits as follows: Year 1 Year 2 Year 4 $0 $1,000 $20,000 Year 2 Year 3 $30,000 Project B will run for 4 years. It has expected costs as follows: Year 1 Year 2 Year 3 $50,000 $5,000 $5,000 Year 4 $2,000 Project B has expected benefits as follows: Year 1 $10,000 $50,000 Year 2 Year 3 $70,000 Year 4 $80,000 Calculate NPV, ROI, and year of Payback to determine which project is financially stronger Use an 8% discount rate: Year 2 Year 1 Year 3 Year 4 1 0.93 0.86 0.79

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