Solution-Calculate the npv for project

Calculate the npv for project

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Reference no: EM133087495

Herman is evaluating two capital projects and must pick one due to money constraints. Cash flows from the two projects are summarized below. Herman's required rate of return on projects is 15%.

Project A		Project B
Year	Amount	Year	Amount
0	-50,000	0	-30,000
1	25,000	1	29,000
2	25,000	2	29,000
3	25,000
4	25,000
5	25,000

Calculate the NPV for each project. Using NPV only, which project should Herman select?
You are Herman's advisor and you understand that only using NPV might lead to the incorrect investment decision in this case. Use the EAA method to advise which project Herman should select.

Reference no: EM133087495

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Calculate the npv for project

Reference no: EM133087495

Reference no: EM133087495

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