Question: Pls, help me solve this without Excel. I got this incorrect. A firm is considering two projects, A and B. Each project will last for
Pls, help me solve this without Excel. I got this incorrect.
A firm is considering two projects, A and B. Each project will last for 4 years. The projects are MUTUALLY EXCLUSIVE. The projected cash flows for each project are shown below:
| Year | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
| Project A | -20.00 | 8.00 | 7.00 | 6.00 | 4.00 |
| Project B | -30.00 | 12.00 | 12.00 | 10.00 | 11.00 |
The cost of capital facing the firm is 9.00%.
The projects are mutually exclusive. Using the NPV decision rule, what is your decision based on the results of part A and part B? (A, B, BOTH, or NONE)
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