Consider the following cash flows on two mutually exclusive projects: Year Project...
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Accounting
Consider the following cash flows on two mutually exclusive projects:
| Year | Project A | Project B | ||||
| 0 | $ | 61,000 | $ | 76,000 | ||
| 1 | 41,000 | 40,000 | ||||
| 2 | 36,000 | 49,000 | ||||
| 3 | 31,000 | 52,000 | ||||
The cash flows of Project A are expressed in real terms while those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 12 percent and the inflation rate is 3 percent. Calculate the NPV for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
| NPV | |
| Project A | $ |
| Project B | $ |
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