Question: You are considering the following two mutually exclusive projects. Should you accept or reject these projects based on net present value (NPV) analysis? Why or

You are considering the following two mutually exclusive projects. Should you accept or reject these projects based on net present value (NPV) analysis? Why or why not? Assume the discount rate for both projects is 7 percent. Year Project A Project B 0 -$320,000 -$525,000 1 $292,000 $396,000 2 $165,000 $319,000 3 $107,000 $204,000 O Project A; because the NPV of the project A is greater than the NPV of the project B. O You cannot make this decision based on net present value analysis. O None; because both have the negative NPV. Project B; because the NPV of the project B is greater than the NPV of the project A. O Both; because Both projects have the positive NPV
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
