● You, a project manager, are in the middle of choosing between two different projects with the following cash flows: Time period 0 1 2 3 4 Project A $(60,000) $5,000 $10,000 $10,000 $75,000 Project B $(60,000) $50,000 $30,000 $10,000 $10,000 Determine which project you should act on using NPV with an interest rate of 12%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 21P
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• You, a project manager, are in the middle of choosing between two
different projects with the following cash flows:
Time period
0
1
2
3
4
Project A
$(60,000)
$5,000
$10,000
$10,000
$75,000
Project B
$(60,000)
$50,000
$30,000
$10,000
$10,000
• Determine which project you should act on using NPV with an
interest rate of 12%.
Transcribed Image Text:• You, a project manager, are in the middle of choosing between two different projects with the following cash flows: Time period 0 1 2 3 4 Project A $(60,000) $5,000 $10,000 $10,000 $75,000 Project B $(60,000) $50,000 $30,000 $10,000 $10,000 • Determine which project you should act on using NPV with an interest rate of 12%.
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