Question: Projects A and B have identical expected lives and identical initial cash outflows (costs). However, most of one project's cash flows come in the early

Projects A and B have identical expected lives and identical initial cash outflows (costs). However, most of one project's cash flows come in the early years, while most of the other project's cash flows occur in the later years. The two NPV profiles are given below:

Question: Which of the two projects would have higher cash flows in the later years? Why? Discuss with logical arguments in detail?

Projects A and B have identical expected lives and identical initial cash

NPV ($) A B r (%)

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