NPV unequal
Grady Enterprises is looking at two project opportunities for a parcel of land the company currently owns. The first project is a restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of
with cash flows over the next six years of
(year one),
(year two),
(years three through five), and
(year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash flows: an initial cost of
with cash flows over the next four years of
(years one through three) and
(year four), at which point Grady plans to sell the facility. If the appropriate discount rate for the restaurant is
and the appropriate discount rate for the sports facility is
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