## Question

# Imagine that you are faced with three alternative projects, each of which costs $1 Million (M). Assuming the discount rate of 10 percent and efficiency

Imagine that you are faced with three alternative projects, each of which costs $1 Million (M). Assuming the discount rate of 10 percent and efficiency is your only criterion, which one of these projects would you choose to undertake?

Project A: A bridge which takes one year to build, then yields $400,000 benefit per year for the next 2 years. Assume that the costs are paid upfront.

Project B: Temporary classrooms for schools yielding $400,000 benefit per year for three years starting from Y1. Assume that all costs are paid in Y1.

## Step by Step Solution

There are 3 Steps involved in it

### Step: 1

To evaluate these projects we need to calculate their net present value NPV using the discount rate ...### Get Instant Access to Expert-Tailored Solutions

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### Step: 2

### Step: 3

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### Molecular Cell Biology

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