Question: Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of
Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 11 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and a half and three and a half years, respectively. Time O 1 2 3 Project A -2,000 500 Cash flow 800 1,300 Project B - 1,500 600 Cash flow 1000 500 The NPV for project A is The NPV for project B is (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)
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