Which project has the highest net present value

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Problem 1: A firm is considering two projects. Both projects will cost $5,000. However, Project 1 will generate cash flows of $2,500 at the end of the first year and $7,500 at the end of the second year and Project 2 will generate cash flows of $7,500 at the end of first year and $2,500 at the end of the second year. Which project has the highest net present value if the required rate of return is 10%

A. Project 1
B. Project 2
C. Both projects have the same net present value
D. Cannot determine from information given

Reference no: EM132962244

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