The following are the cash flows of two projects: Year Project A Project B 0 ?$330 ?$330 1 160 230 2 160...

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Finance

The following are the cash flows of two projects:
Year Project A Project B
0 ?$330        ?$330
1 160        230
2 160        230
3 160        230
4 160
a. Calculate the NPV for both projects if the opportunity cost ofcapital is 17%. (Do not round intermediate calculations.Round your answers to 2 decimal places.)
Project NPV
A $
B

b. Suppose that you can choose only one of these projects. Whichwould you choose?
Project A
Project B
Neither

Answer & Explanation Solved by verified expert

3.9 Ratings (636 Votes)

Net Present Value NPV of PROJECTA Period Annual Cash Flow Present Value factor at 17 Present Value of Cash Flow 1 160 085470 13675 2 160 073051 11688 3 160 See Answer

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Transcribed Image Text

The following are the cash flows of two projects:YearProject AProject B0?$330 ?$330 1160 230 2160 230 3160 230 4160 a.Calculate the NPV for both projects if the opportunity cost ofcapital is 17%. (Do not round intermediate calculations.Round your answers to 2 decimal places.)ProjectNPV A$ B b.Suppose that you can choose only one of these projects. Whichwould you choose?Project AProject BNeither