9. Individual R is considering two investments. Each will cost $20,000 initially. Project 1 will return annual cash flows of $10,000 in each of three years. Project 2 will return $5,000 in year 1, $10,000 in year 2, and $15,000 in year 3. Roman requires a minimum rate of return of 10%. What is the NPV of Project 1, Project 2,? Which project must be selected? (round off to the nearest tens). $20,000; $20,220; Project 2 O $25,670; $24,520; Project 2 $4,870; $4,080; Project 1 $22,530; $22,510; Project 1
9. Individual R is considering two investments. Each will cost $20,000 initially. Project 1 will return annual cash flows of $10,000 in each of three years. Project 2 will return $5,000 in year 1, $10,000 in year 2, and $15,000 in year 3. Roman requires a minimum rate of return of 10%. What is the NPV of Project 1, Project 2,? Which project must be selected? (round off to the nearest tens). $20,000; $20,220; Project 2 O $25,670; $24,520; Project 2 $4,870; $4,080; Project 1 $22,530; $22,510; Project 1
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 7P
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