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Which project should be chosen if npv method of project

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Reference no: EM132940118

Problem 1: Consider two projects: project S and project L. Initial net cash outflow for both projects are $3,000. Cash inflows from project S for years 1 - 4 are $1,500, $1,200, $800 and $300 respectively. Cash inflows from project L for years 1 - 4 are $400, $900, $1,300 and $1,500 respectively. If S and L are mutually exclusive projects and the required rate of return for both projects is 10%, which project should be chosen if NPV method of project evaluation is used? (You must show your workings to support your answer)

Reference no: EM132940118

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