Question: project has the higher net present value? Uuuu Draw 6. Consider the following two projects: Proiect t=0 t=1 t=2 t=3 A -2,002 1,200 1,200 0
project has the higher net present value? Uuuu Draw 6. Consider the following two projects: Proiect t=0 t=1 t=2 t=3 A -2,002 1,200 1,200 0 B -2,010 0 0 2,600 a. Calculate the net present value of each project for the following rates of return: 0%, 58, 10%, 15%, and 20%. Plot these numbers on a graph with NPV on the vertical axis and rate of return on the horizontal axis. b. What is the internal rate of return of each project? c. Assume the company can, at most, accept only one of these projects. For what range of rates of return should the company accept project A? 7. Calculate the profitability Index for a project with the following cash flows the opportunity cost of capital de 15
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