Question: JT Engineering is considering two projects. Project A will generate $140,000 net cash flows over 6 years, and annual cash flows will decrease over time.

JT Engineering is considering two projects. Project A will generate $140,000 net cash flows over 6 years, and annual cash flows will decrease over time. Project B will also generate $140,000 over 6 years, and cash flows will remain equal. Which project has the higher net present value (NPV)? O Project A's NPV is higher than Project B's NPV. Since Project B has equal cash flows, the present value of its cash flows will be calculated using the present value of an annuity factor resulting in a higher NPV. O Project B's NPV is higher than Project A's NPV. Both Project A and Project B have the same NPV

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!