You are considering two mutually exclusive projects, A and B. Project A costs $70,000 and generates cash...

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Finance

You are considering two mutually exclusive projects, A andB.
Project A costs $70,000 and generates cash flows of $12,000 for10 years.
Project B costs $60,000 and generates cash flows of $2,000 forsix years and then cash flows of $29,000 for four years.
Which project would you accept if your discount rate was 10%?Which project would you accept if your discount rate was 5%?

Answer & Explanation Solved by verified expert

4.4 Ratings (668 Votes)

1Project A Net present value is calculated using a financial calculator by inputting the below Press the CF button CF0 70000 It is entered with a negative sign since it is a cash outflow Cash flow for each year should be entered Press Enter and down arrow after inputting each cash flow After entering the third cash flow cash flow press the NPV button and enter the discount of 10 Press enter after that Press the down arrow and CPT buttons to get the See Answer

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You are considering two mutually exclusive projects, A and B. Project A costs $70,000 and generates cash...

80.2K

Verified Solution

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Finance

Answer & Explanation Solved by verified expert

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