We have two mutually exclusive projects A and B. Both require initial costs of $10,000 and...
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We have two mutually exclusive projects A and B. Both require initial costs of $10,000 and last for 4 years. Project A has expected future cash flows of $4,000, $5,000, $8,000 and $3,000, respectively. Project B has expected future cash flows of $8,000, $9,000, $2,000 and -$3,000. If the required return for project A is 20% and the required return for project B is 9% which project should we start? OA. Because its NPV is $5158.19 which is higher than the NPV of project B, which is $4333.66 O Have no idea OB. Because its npv 4333.66 is higher than the NPV of A, which is 2881.94. Start both projects because both of them have positive NPVs We have two mutually exclusive projects A and B. Both require initial costs of $10,000 and last for 4 years. Project A has expected future cash flows of $4,000, $5,000, $8,000 and $3,000, respectively. Project B has expected future cash flows of $8,000, $9,000, $2,000 and -$3,000. If the required return for project A is 20% and the required return for project B is 9% which project should we start? OA. Because its NPV is $5158.19 which is higher than the NPV of project B, which is $4333.66 O Have no idea OB. Because its npv 4333.66 is higher than the NPV of A, which is 2881.94. Start both projects because both of them have positive NPVs
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