The following are the cash flows of two projects: Year Project A Project B 0 -$240 -$240
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Question:
The following are the cash flows of two projects:
Year | Project A | Project B |
---|---|---|
0 | -$240 | -$240 |
1 | 120 | 140 |
2 | 120 | 140 |
3 | 120 | 140 |
4 | 120 |
a. Calculate the NPV for both projects if the discount rate is 12%.
b. Suppose that you can choose only one of these projects. Which would you choose? Project A, Project B or Neither.
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