You've estimated the following cash flows (in $) for two projects: Year Project A Project B 0 -5,100 -7,650 1 1,325 1,325 2 2,148 2,148 3 3,504 7,040 The required return for both projects is 8%. What is the NPV for project A? What is the NPV for project B? Which project seems better according to the NPV method? Project A Project B
You've estimated the following cash flows (in $) for two projects: Year Project A Project B 0 -5,100 -7,650 1 1,325 1,325 2 2,148 2,148 3 3,504 7,040 The required return for both projects is 8%. What is the NPV for project A? What is the NPV for project B? Which project seems better according to the NPV method? Project A Project B
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.4IP
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You've estimated the following cash flows (in $) for two projects:
Year | Project A | Project B |
0 | -5,100 | -7,650 |
1 | 1,325 | 1,325 |
2 | 2,148 | 2,148 |
3 | 3,504 | 7,040 |
The required return for both projects is 8%.
What is the NPV for project A?
What is the NPV for project B?
Which project seems better according to the NPV method?
Project A
Project B
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