A company is considering two projects. The discount rate is 10 percent, and the projects’ cash flows would be: Years 0 1 2 3 Project A -$700 $500 $300 $100 Project B -$700 $100 $300 $600 Calculate the...


A company is considering two projects. The discount rate is 10 percent, and the projects’ cash flows would be:




























Years



0



1



2



3




Project A



-$700



$500



$300



$100




Project B



-$700



$100



$300



$600




  1. Calculate the projects’ NPVs.

  2. If the two projects are independent, which project(s) should be chosen?

  3. If the two projects are mutually exclusive, which project should be chosen?



Jun 04, 2022
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