A company is considering to invest in two capital expenditures project. The expected future cash flows of the projects are given below: Project A Project B £ £ Initial Outlay (350,000) (300,000) Cash flow Year 1 250,000 200,000 Cash flow Year 2 260,000 210,000 Each project can be undertaken only once. The cost of capital of the company is 10%. Required Calculate the Net Present Value (NPV) of Project A and Project B.
A company is considering to invest in two capital expenditures project. The expected future cash flows of the projects are given below: Project A Project B £ £ Initial Outlay (350,000) (300,000) Cash flow Year 1 250,000 200,000 Cash flow Year 2 260,000 210,000 Each project can be undertaken only once. The cost of capital of the company is 10%. Required Calculate the Net Present Value (NPV) of Project A and Project B.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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