Question: Initial investment (CF) Outcome Pessimistic Most likely Optimistic Project A Project B $12,600 $12,600 Annual cash inflows (CF) $820 $1,590 1,700 1,700 2,400 1,780 a.

Initial investment (CF) Outcome Pessimistic Most likely Optimistic Project A Project

Initial investment (CF) Outcome Pessimistic Most likely Optimistic Project A Project B $12,600 $12,600 Annual cash inflows (CF) $820 $1,590 1,700 1,700 2,400 1,780 a. Determine the range of annual cash inflows for each of the two projects. b. Assume that the firm's cost of capital is 10.8% and that both projects have 19-year lives. Construct a table showing the NPVs for each project for each of the possible outcomes. Include the range of NPVs for each project. c. Do parts (a) and (b) provide consistent views of the two projects? Explain. d. Which project do you recommend? Why

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