Consider the following cash inflows and outflows related to project A and project B. CASH INFLOWS AND OUTFLOWS (IN $ 1,000) Project AYear 1Year 2Year 3Year 4Year 5Year 6Benefits $60$40$55$40$40$60Costs$120$20$30$20$15$25 Project BYear 1Year 2Year 3Year 4Year 5Year 6Benefits $65$90$44$40$20$20Costs$137$45$22$20$8$7 For each project, calculate the NPV assuming 15% discount rate, and determine which of the two projects would you prefer? Show the detailed calculation with the formula to justify your answer.

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Computer Networking: A Top-Down Approach (7th Edition)

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ISBN:9780133594140

Author:James Kurose, Keith Ross

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Consider the following cash inflows and outflows related to project A and project B.

	CASH INFLOWS AND OUTFLOWS (IN $ 1,000)

Project A	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6
Benefits	$60	$40	$55	$40	$40	$60
Costs	$120	$20	$30	$20	$15	$25


Project B	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6
Benefits	$65	$90	$44	$40	$20	$20
Costs	$137	$45	$22	$20	$8	$7

For each project, calculate the NPV assuming 15% discount rate, and determine which of the two projects would you prefer? Show the detailed calculation with the formula to justify your answer.

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