Question: Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 - 78500 -78500 1 43000 21000 2

Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 - 78500 -78500 1 43000 21000 2 29000 28000 3 23000 34000 4 21000 41000 if the required return is 12 percent, what is the NVP for each of these projects? Which project will you choose if you apply the NVP decision rule? Which project should the company accept? What discount rate would you be indifferent between these two projects ?

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