Calculate the npv for both services

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Reference no: EM13205115

A phone company with a discount rate of 8% is considering two investments.

Residential Service Commercial Service
Initial Cost $(50,000) $(100,000)
Year 1 20,000 50,000
Year 2 20,000 50,000
Year 3 20,000 50,000

A.) Calculate the NPV for both services.
B.) If the phone company can provide only one service currently, which project should it choose?
C.) If this is a regulated service industry, explain why the phone company may have to invest in the residential service.

Reference no: EM13205115

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