Justin Beaver (JB) is evaluating 2 investment options, project 1 (P1) or project 2 (P2), both...
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Justin Beaver (JB) is evaluating 2 investment options, project 1 (P1) or project 2 (P2), both giving the same amount of positive NPV. The following annual cash flows are expected, and JB expects 10% return from each investment. Each project requires an initial investment in Year 0, and JB has a limited investment fund. Which project JB should choose and why? Year 123 Cash Flow (P1) $6,000 6,000 6,000 Cash Flow (P2) $5,000 7,000 6,000 Justin Beaver (JB) is evaluating 2 investment options, project 1 (P1) or project 2 (P2), both giving the same amount of positive NPV. The following annual cash flows are expected, and JB expects 10% return from each investment. Each project requires an initial investment in Year 0, and JB has a limited investment fund. Which project JB should choose and why? Year 123 Cash Flow (P1) $6,000 6,000 6,000 Cash Flow (P2) $5,000 7,000 6,000
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