Question: You are considering two projects. Project A has projected cash flows of $6,500, $4,500, and $2,500 for the next three years, respectively. Project B has
You are considering two projects. Project A has projected cash flows of $6,500, $4,500, and $2,500 for the next three years, respectively. Project B has projected cash flows of $2,500, $4,500, and $6,500 for the next three years, respectively. Assuming both projects have the same initial cost, you know that:
Project A is more valuable than Project B given a positive discount rate.
there are no conditions under which the projects can have equal values.
Project B has a higher net present value than Project A.
both projects offer the same rate of return
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