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Evaluation which project should be selected

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Question 1: Consider two mutually exclusive projects: Project A and Project B. both projects have initial cash outflow of $1,000 at year 0. Cash inflows for project A in year 1 and 2 are $1,150 and $100 respectively, while cash inflows for project B in year 1 and 2 are $100 and $1,300 respectively. both firm's cost of capital is 10%. According to NPV method of project evaluation which project should be selected? (You must show your workings to support your answer)

Reference no: EM132940106

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