Calculate the net present value of project a

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You have the option of choosing between two projects that differ in their costs and revenues.The interest rate is 10%.

Project A: immediate cost of $100,000. This project would bring in $12,000 per year forever,starting at the end of the first year.

Project B: immediate cost of $60,000. This project would bring in $10,000 per year forever,starting at the end of the first year.

a) Calculate the net present value of project A.

b) Calculate the net present value of project B

c) Which project should you invest is?

d) At what interest rate would you be indifferent between projects A and B?

Reference no: EM131398772

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