What is the best reason for that decision

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Reference no: EM131965511

Katy Perry is considering the following two mutually exclusive projects (dance Studios). The required return on each project is 12 percent.

Which project should he accept and what is the best reason for that decision?

Project A (Roar ) Project B (Dark Horse)

Year 0 -$10,000 -$20,000

Year 1 $ 3,000 $ 5,000

Year 2 $ 8,000 $ 7,000

Year 3 $ 4,000 $12,000

Year 4 $ 2,000 $10,000

a. Project A; because it pays back the same

b. Project A; because it pays back slower

c. Project A; because it has the higher net present value

d. Project B; because it has the higher net present value

Please provide explanation & detail calculation using BAII calculator.

Reference no: EM131965511

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