Question: You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows: Year Project A Cash Flow Project B
You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
| Year | Project A Cash Flow | Project B Cash Flow |
|---|---|---|
| 0 | $(100,000) | $(100,000) |
| 1 | 33,000 | 0 |
| 2 | 33,000 | 0 |
| 3 | 33,000 | 0 |
| 4 | 33,000 | 0 |
| 5 | 33,000 | 220,000 |
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If the appropriate discount rate on these projects is
10
percent, which would be chosen and why?
The NPV of Project A is
$nothing.
(Round to the nearest cent.)
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