Search this course Ch 11- Blueprint Problems - The Basics of Capital Budgeting The net present value (NPV) method estimates how much a potential project will contribute tot B. and it is the best selection criterion. The the NPV. the more value the project adds; and added value meansa B Mock price. In equation form, the NPV is defined as; NPV - CF + + C CF + (..) (1+1) C is the expected cash flow at Time t, the project's risk adjusted cost of capital, and Nis site, and cash outflows are treated as negative imh flow. The NPV calculation ostumes that cash inhows can be reinvested at the project's risk adjusted ten B. When the form is considering independent projects, the project's NPV exceeds ter the firm should the project. When the firm is considering mutually exclusive projects, the firm should accept the project with the BNP Quantitative Problemi Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cath flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4 year lives, and they have risk characteristics similar to the firm's average project. Belinger's WACC 8% 0 2 3 Project Projects -900 -900 600 200 355 290 260 410 310 760 What is Project A's NPV? Do not round intermediate calculations. Round your answer to the nearest cent $ What is Project B's NPV? Do not round intermediate calculations, Round your answer to the nearest cent. $ If the projects were independent, which project(s) would be accepted? if the projects were mutual exclusive, which project() would be accepted