A firm is considering two projects, A and B. Each project will last for 4 years....

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Finance

A firm is considering two projects, A and B. Each project willlast for 4 years. The projects are INDEPENDENT. The projected cashflows for each project are shown below:
Year 0 1 2 3 4
Project A -20.00 8.00 8.00 6.00 4.00
Project B -30.00 10.00 10.00 11.00 9.00
The cost of capital for the firm is 10.00%. What is the NPV forproject A at the cost of capital?
Answer Format: Currency: Round to: 2 decimal places.

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3.6 Ratings (665 Votes)

				Present Value
Year	Project A	Project B	DF at 10%	Project A	Project B
	A	B	C	D = A x C	E = B x C
0	-20	-30	1.0000	$ (20.00)	$ (30.00)
1	8	10	0.9091	$ 7.27	$ 9.09
2	8	10	0.8264	$ 6.61	$ 8.26
3	6	11	0.7513	$ 4.51	$ 8.26
4	4	9	0.6830	$ 2.73	$ 6.15
			NPV = Sum total	$ 1.12	$ 1.77

So NPV for project A is $1.12

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A firm is considering two projects, A and B. Each project willlast for 4 years. The projects are INDEPENDENT. The projected cashflows for each project are shown below:Year 0 1 2 3 4Project A -20.00 8.00 8.00 6.00 4.00Project B -30.00 10.00 10.00 11.00 9.00The cost of capital for the firm is 10.00%. What is the NPV forproject A at the cost of capital?Answer Format: Currency: Round to: 2 decimal places.