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The following net cash flows relate to two projects: NET CASH FLOWS (IN $1,000) YEAR 0 1 2 3 4 5 6 PROJECT A -60 20 20 20 20 20 20 PROJECT B -72 45 22 20 13 13 13 Which of the two projects would you prefer if they are mutually exclusive, given a 15% discount rate? Take both as they are above the MARR None would be good because they have a similar IRR. Prefer A Prefer B

The following net cash flows relate to two projects: NET CASH FLOWS (IN $1,000) YEAR 0 1 2 3 4 5 6 PROJECT A -60 20 20 20 20 20 20 PROJECT B -72 45 22 20 13 13 13 Which of the two projects would you prefer if they are mutually exclusive, given a 15% discount rate? Take both as they are above the MARR None would be good because they have a similar IRR. Prefer A Prefer B

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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The following net cash flows relate to two projects: YEAR PROJECT A PROJECT B -72 NET CASH FLOWS (IN $1,000) Prefer A 0 1 2 3 -60 20 Prefer B 4 5 6 20 20 20 20 20 22 20 13 13 13 45 Which of the two projects would you prefer if they are mutually exclusive, given a 15% discount rate? Take both as they are above the MARR None would be good because they have a similar IRR.
Transcribed Image Text:The following net cash flows relate to two projects: YEAR PROJECT A PROJECT B -72 NET CASH FLOWS (IN $1,000) Prefer A 0 1 2 3 -60 20 Prefer B 4 5 6 20 20 20 20 20 22 20 13 13 13 45 Which of the two projects would you prefer if they are mutually exclusive, given a 15% discount rate? Take both as they are above the MARR None would be good because they have a similar IRR.
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