Question: please solve only B 6. Suppose you are evaluating two mutually exclusive projects, Thing 1 and Thing 2, with the following cash flows: Year 2000
6. Suppose you are evaluating two mutually exclusive projects, Thing 1 and Thing 2, with the following cash flows: Year 2000 2001 2002 2003 2004 End-of-year cash flows Thing 1 -$10,000 Thing 2 -$10,000 3,293 3,293 3,293 3,293 0 0 0 14,641 (a) If the cost of capital on both projects is 5%, which project, if any, would you choose? Why? (b) If the cost of capital on both projects is 8%, which project, if any, would you choose? Why? (c) If the g
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
