Consider two projects with the following cash flow: year project A project...
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Accounting
Consider two projects with the following cash flow:
| year | project A | project b |
| 1 | 800 | 960 |
| 2 | 820 | 900 |
| 3 | 900 | 820 |
| 4 | 960 | 900 |
Indicate whether each statement is TRUE or FALSE:
(T/F) At 10% per year, both Projects have cash flow equivalent to an annuity that gives 880 per year.
(T/F) Given a positive interest rate, the future value of Project B is higher than that of Project A.
(T/F) If the payback period method rejects Project A, it would also reject Project B.
(T/F) If the payback period method accepts Project B, it would also accept Project A.
(T/F) Given a positive interest rate, the future value of Project B is higher than Project A but the present value of Project A is higher than Project B.
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