The following are the cash flows of two independent projects: Year Project A Project B 0 $ (280 ) $ (280 ) 1 160 180 2 160 180 3 160 180 4 160 a. If the opportunity cost of capital is 10%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Which of these projects is worth pursuing? Project A Project B Both Neither
The following are the cash flows of two independent projects: Year Project A Project B 0 $ (280 ) $ (280 ) 1 160 180 2 160 180 3 160 180 4 160 a. If the opportunity cost of capital is 10%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Which of these projects is worth pursuing? Project A Project B Both Neither
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 7P
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The following are the cash flows of two independent projects:
Year | Project A | Project B | ||||
0 | $ | (280 | ) | $ | (280 | ) |
1 | 160 | 180 | ||||
2 | 160 | 180 | ||||
3 | 160 | 180 | ||||
4 | 160 | |||||
a. If the
b. Which of these projects is worth pursuing?
-
Project A
-
Project B
-
Both
-
Neither
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