Which project should be chosen and what is its npv

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Question - Capital Investment Decision - Quorex is evaluating two mutually exclusive projects. Project A has a net investment of $48,000 and net cash flows over a six-year period of $12,500 per year (that is reinvestment with the same cost and cash flow for another six years). Project B also has a net investment of $48,000, but its net cash flows of $8,640 per year will occur over a 12- year period. If Quorex has a cost of capital of 14% for these projects, which project, if either, should be chosen, and what is its NPV?

Reference no: EM133140591

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