Question: Problem 3(5 points): Consider the following two projects: Year 0 Year Year 2 Year3 Year 4 Discount Project Cash Flow Cash Flow Cash Flow Cash

Problem 3(5 points): Consider the following two projects: Year 0 Year Year 2 Year3 Year 4 Discount Project Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow Rate 15 15 -100 40 30 50 60 N/A -73 30 30 30 Write down your explanation for each question! You will receive zero point if you get the right answer without the correct explanation. a) The NPV of project A is closest to: A) 12.0 B) 12.6 C) 15.0 D) 42.9 Answer Explanation b) The NPV of project B is closest to: A) 12.6 B) 23.3 C) 12.0 D) 15.0 Answer Explanation
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