The following are the cash flows of two projects: Year Project A Project B 0 $ (260 ) $ (260 ) 1 140 160 2 140 160 3 140 160 4 140 a. Calculate the NPV for both...

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Finance

The following are thecash flows of two projects:
Year Project A Project B
0 $ (260 ) $ (260 )
1 140 160
2 140 160
3 140 160
4 140
a. Calculate the NPV for both projects if theopportunity cost of capital is 16%. (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)
Project A
Project B
b.Suppose that you can choose only one of these projects. Which wouldyou choose?
Project A
Project B
Neither

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3.9 Ratings (374 Votes)

a Calculating NPV of project ACash flows for Project A areCash Flow for the Project AYear01234Cash flow260140140140140NPV of Project A Cash flow in year 0 Sum of present valuesof cash flows for year 1 to 4 discounted at Opportunity cost ofcapital of 16 260 140 1 16 140 1 162 140 1 163 140 1 164NPV of project A 260 See Answer

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The following are thecash flows of two projects:YearProject AProject B0$(260)$(260)1140160214016031401604140a. Calculate the NPV for both projects if theopportunity cost of capital is 16%. (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)Project AProject Bb.Suppose that you can choose only one of these projects. Which wouldyou choose?Project AProject BNeither

Year	Project A			Project B
0	$	(260	)	$	(260	)
1		140			160
2		140			160
3		140			160
4		140