​(Mutually exclusive projects and​ NPV)   You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash​ flows: Year Project A Cash Flow Project B Cash Flow   0 ​$(100,000​) ​$(100,000​) 1    33,000            0 2    33,000            0 3    33,000            0 4    33,000            0 5    33,000   220,000 If the appropriate discount rate on these projects is 10 ​percent, which would be chosen and​ why? The NPV of Project A is ​$  ​(Round to the nearest​ cent.) The NPV of Project B is ​$  ​(Round to the nearest​ cent.) Which project would be chosen and​ why?  ​ (Select the best choice​ below.)   A. Choose Upper B because its NPV is higher.   B. Cannot choose without comparing their IRRs.   C. Choose Upper A because its NPV is higher.   D. Choose both because they both have positive NPVs.

Question

​(Mutually exclusive projects and​ NPV)  

You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash​ flows:

Year
Project A
Cash Flow
Project B
Cash Flow
 
0
​$(100,000​)
​$(100,000​)
1
   33,000
           0
2
   33,000
           0
3
   33,000
           0
4
   33,000
           0
5
   33,000
  220,000

If the appropriate discount rate on these projects is 10 ​percent, which would be chosen and​ why?


The NPV of Project A is ​$  ​(Round to the nearest​ cent.)


The NPV of Project B is ​$  ​(Round to the nearest​ cent.)

Which project would be chosen and​ why?  ​

(Select the best choice​ below.)

 
A.
Choose Upper B because its NPV is higher.
 
B.
Cannot choose without comparing their IRRs.
 
C.
Choose Upper A because its NPV is higher.
 
D.
Choose both because they both have positive NPVs.

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