Question: Two projects being considered are mutually exclusive and have the following cash flows: Year Project A Project B 0 -$50,000 -$50,000 1 15,000 0 2

  1. Two projects being considered are mutually exclusive and have the following cash flows:

Year

Project A

Project B

0

-$50,000

-$50,000

1

15,000

0

2

15,000

0

3

15,000

0

4

15,000

0

5

15,000

90,000

1) Calculate NPV of each project if the required rate of return on these projects is 8 percent.

2) which would be chosen and why?

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