Solution-Net present value-independent projects

Net present value-independent projects

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Net present value-Independent projects. Using a 14% cost of capital, calculate the net present value for each of the independent projects shown in the following table, and indicate whether each is acceptable.

	Project A	Project B
Initial investment (CF₀)	$26,000	$500,000
Year (t)	Cash inflows (CF_t)
1	$4,000	$100,000
2	4,000	120,000
3	4,000	140,000
4	4,000	160,000
5	4,000	180,000
6	4,000	200,000
7	4,000
8	4,000
9	4,000
10	4,000

Reference no: EM13978864

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Net present value-independent projects

Reference no: EM13978864

Reference no: EM13978864

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