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 A
(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 | $(105,000) | $(105,000) |
| 1 | 35,000 | 0 |
| 2 | 35,000 | 0 |
| 3 | 35,000 | 0 |
| 4 | 35,000 | 0 |
| 5 | 35,000 | 215,000 |
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If the appropriate discount rate on these projects is
11
percent, which would be chosen and why?
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Part 1
The NPV of Project A is
$24,356.4024,356.40.
(Round to the nearest cent.)
Part 2
The NPV of Project B is
$enter your response here.
(Round to the nearest cent.)
-If the appropriate discount rate on these projects is
11
percent, which would be chosen and why?
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