Question: Here are the cash-flow forecasts for two mutually exclusive projects: Year Cash Flows (dollars) Project A Project B 0 110 110 1 40 59 2
Here are the cash-flow forecasts for two mutually exclusive projects:
| Year | Cash Flows (dollars) | |
|---|---|---|
| Project A | Project B | |
| 0 | 110 | 110 |
| 1 | 40 | 59 |
| 2 | 60 | 59 |
| 3 | 80 | 59 |
a-1. What is the NPV of each project if the opportunity cost of capital is 4%?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
a-2. Which project would you choose?
b-1. What is the NPV of each project if the opportunity cost of capital is 10%?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
b-2. Which would you choose?
Please answer A-1 and B-1.
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