Question: Two projects have the same initial cost. Project A has estimated cash flows of $1,000, $2,000, $3,000, $4,000 at the end of years 1 to

 Two projects have the same initial cost. Project A has estimated

Two projects have the same initial cost. Project A has estimated cash flows of $1,000, $2,000, $3,000, $4,000 at the end of years 1 to 4 respectively. Project B has estimated cash flows of $4,000, $3,000, $2,000, $1,000 at the end of years 1 to 4 respectively. Which project will have the greater NPV assuming a positive discount rate? Select one: a. Project A b. Project B c. The NPV will be the same for both Project A and Project B d. Cannot determine from the information given

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!