The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in.             Expected Net Cash Flow Year                                                    Restaurant & Bar                                         Hardware                                                                         $M                                                               $M 0                                                                       (200)                                                        (200) 1                                                                        10                                                               70 2                                                                       60                                                               50 3                                                                        100                                                                40 4                                                                        120                                                                80 5                                                                      150                                                              100               A. Explain the difference between independent projects and mutually exclusive projects. B. Compute the Net Present Value (NPV) for each project.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in.

            Expected Net Cash Flow

Year                                                    Restaurant & Bar                                         Hardware

                                                                        $M                                                               $M

0                                                                       (200)                                                        (200)

1                                                                        10                                                               70

2                                                                       60                                                               50

3                                                                        100                                                                40

4                                                                        120                                                                80

5                                                                      150                                                              100

 

            A. Explain the difference between independent projects and mutually exclusive projects. B. Compute the Net Present Value (NPV) for each project.

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