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Evaluate what is the net present value of project a

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Reference no: EM132987393

Suppose you're a financial analyst at a company, and you are recommending whether the company should invest in Project A or Project B both at P2,000,000 investment. Each of the two projects has been proposed by a lead engineer, but the company can only invest in creating one of them this year, and so your manager wants you to give her advice on which one to invest in. Your company's WACC is 10%. Project A's forecast for Years 1 to 4 is at P2,000,000 profit and P0 at Year 5. Project B's forecast is P0 profit for Years 1 to 4 and 10,000,000 profit at year 5.

Problem 1: Which project will you recommend?

Problem 2: What is the net present value of Project A?

Reference no: EM132987393

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