What is the net present value of project a

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You work at a construction company with a stated cost of capital of 12%. Your company is currently deciding between two different projects. Project A will pay you $800,000 up front and $1.5 million after 4 years. You will have to spend $300,000 now, and $400,000 once a year for the next 4 years. Project B will pay you $1.2 million up front and cost you $1.1 million in 4 years.

#1) What is the net present value of Project A?

#2) What is the net present value of Project B?

#3) Which project should your company decide to take on?

Reference no: EM132790990

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