Question: Two projects A and B have the same Investment outlay of Rs. 200000. The cash inflows for the two projects are given as follows: If

Two projects A and B have the same Investment outlay of Rs. 200000. The cash inflows for the two projects are given as follows:

Two projects A and B have the same Investment outlay of Rs.

If the reinvestment rate is 20 % and the cost of capital is 10%, which project would you prefer?

Year 1 2 3 4 Project A 40000 50000 70000 90000 Project B 80000 60000 60000 4000

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