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Opportunity cost of capital

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The following are the cash flows of two projects: (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Year Project A Project B

0 $(340) $(340)

1  170   240

 2  170   240 

3  170   240 

4  170    

a. If the opportunity cost of capital is 10%, calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. Which of these projects is worth pursuing?

  • Project A
  • Project B
  • Both
  • Neither

The following are the cash flows of two projects:

Year Project A Project B

0 $(370) $(370)

1  200   270 

2  200   270 

3  200   270 

4  200    

a. Calculate the NPV for both projects if the discount rate is 10%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. Suppose that you can choose only one of these projects. Which would you choose?

  • Project B
  • Project A
  • Neither

Reference no: EM132345839

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