Consider the following cash flows on two mutually exclusive projects: Year ...
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Finance
Consider the following cash flows on two mutually exclusive projects:
| Year | Project A | Project B | ||
| 0 | $ | 68,000 | $ | 83,000 |
| 1 | 48,000 | 47,000 | ||
| 2 | 43,000 | 56,000 | ||
| 3 | 38,000 | 59,000 | ||
The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 11 percent and the inflation rate is 5 percent. Calculate the NPV for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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