Question: (Mutually exclusive projects and NPV) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: YEAR PROJECT
(Mutually exclusive projects and NPV)
You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
| YEAR | PROJECT A CASH FLOW | PROJECT B CASH FLOW |
| ||
| 0 | $95,000 | $95,000 | |||
| 1 | 33,000 | 0 | |||
| 2 | 33,000 | 0 | |||
| 3 | 33,000 | 0 | |||
| 4 | 33,000 | 0 | |||
| 5 | 33,000 | 200,000 | |||
|
| |||||
.
If the appropriate discount rate on these projects is 9 percent, which would be chosen and why?
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